This article will reflect on the compensation paid to Greg Brown who has served as CEO of Motorola Solutions, Inc. (NYSE:MSI) since 2011. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Motorola Solutions.
View our latest analysis for Motorola Solutions
How Does Total Compensation For Greg Brown Compare With Other Companies In The Industry?
At the time of writing, our data shows that Motorola Solutions, Inc. has a market capitalization of US$28b, and reported total annual CEO compensation of US$24m for the year to December 2019. Notably, that’s an increase of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$1.3m. This suggests that Greg Brown is paid more than the median for the industry. Furthermore, Greg Brown directly owns US$73m worth of shares in the company, implying that they are deeply invested in the company’s success.
|
Component |
2019 |
2018 |
Proportion (2019) |
|
Salary |
US$1.3m |
US$1.3m |
5% |
|
Other |
US$22m |
US$19m |
95% |
|
Total Compensation |
US$24m |
US$20m |
100% |
On an industry level, around 28% of total compensation represents salary and 72% is other remuneration. It’s interesting to note that Motorola Solutions allocates a smaller portion of compensation to salary in comparison to the broader industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
Motorola Solutions, Inc.’s Growth
Over the past three years, Motorola Solutions, Inc. has seen its earnings per share (EPS) grow by 4.2% per year. It saw its revenue drop 3.2% over the last year.
We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. It’s hard to reach a conclusion about business performance right now. This may be one to watch. 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 Motorola Solutions, Inc. Been A Good Investment?
We think that the total shareholder return of 89%, over three years, would leave most Motorola Solutions, Inc. 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.
To Conclude…
As previously discussed, Greg is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, shareholder returns for the last three years have been excellent. On the other hand, EPS growth — over the same period — is not as impressive. We’d ideally want to see higher EPS growth, but CEO compensation seems to be within reason, given high shareholder returns.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That’s why we did some digging and identified 3 warning signs for Motorola Solutions that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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