Is United States Cellular Corporation’s (NYSE:USM) CEO Being Overpaid?
Ken Meyers has been the CEO of United States Cellular Corporation (NYSE:USM) since 2013. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for United States Cellular
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How Does Ken Meyers’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that United States Cellular Corporation has a market cap of US$4.8b, and is paying total annual CEO compensation of US$7.8m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$996k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.4m.
That means Ken Meyers receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at United States Cellular, below.
Is United States Cellular Corporation Growing?
Over the last three years United States Cellular Corporation has shrunk its earnings per share by an average of 16% per year. It achieved revenue growth of 2.0% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has United States Cellular Corporation Been A Good Investment?
I think that the total shareholder return of 49%, over three years, would leave most United States Cellular Corporation shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary…
Remuneration for Ken Meyers is close enough to the median pay for a CEO of a similar sized company .
The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we can’t see a reason to suggest the pay is inappropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at United States Cellular.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
