How Does Raytheon Technologies' (NYSE:RTX) CEO Pay Compare With Company Performance?
NYSE:RTX) in 2014, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether Raytheon Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.” data-reactid=”28″>Greg Hayes became the CEO of Raytheon Technologies Corporation (NYSE:RTX) in 2014, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether Raytheon Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Raytheon Technologies ” data-reactid=”29″>Check out our latest analysis for Raytheon Technologies
How Does Total Compensation For Greg Hayes Compare With Other Companies In The Industry?
Our data indicates that Raytheon Technologies Corporation has a market capitalization of US$97b, and total annual CEO compensation was reported as US$22m for the year to December 2019. Notably, that’s an increase of 17% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.6m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$17m. This suggests that Raytheon Technologies remunerates its CEO largely in line with the industry average. Moreover, Greg Hayes also holds US$13m worth of Raytheon Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$1.6m | US$1.6m | 7% |
| Other | US$20m | US$17m | 93% |
| Total Compensation | US$22m | US$18m | 100% |
Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. It’s interesting to note that Raytheon Technologies allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
A Look at Raytheon Technologies Corporation’s Growth Numbers
Over the last three years, Raytheon Technologies Corporation has shrunk its earnings per share by 67% per year. It achieved revenue growth of 41% over the last year.
this free visual depiction of what analysts expect for the future.” data-reactid=”54″>The reduction in earnings, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Raytheon Technologies Corporation Been A Good Investment?
With a three year total loss of 0.3% for the shareholders, Raytheon Technologies Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude…
As we touched on above, Raytheon Technologies Corporation is currently paying a compensation that’s close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, revenues have increased over the past year, a positive sign for the company. On the other hand, shareholder returns for Greg are negative over the same period. EPS is also not growing, undoubtedly leading to further headaches. We’d say CEO compensation isn’t unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.
5 warning signs for Raytheon Technologies (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.” data-reactid=”63″>CEO pay is simply one of the many factors that need to be considered while examining business performance. That’s why we did our research, and identified 5 warning signs for Raytheon Technologies (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.
list of high return, low debt companies is a great place to look.” data-reactid=”64″>Switching gears from Raytheon Technologies, if you’re hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”65″>This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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