Is II-VI Incorporated’s (NASDAQ:IIVI) CEO Being Overpaid?

Simply Wall St

Chuck Mattera has been the CEO of II-VI Incorporated (NASDAQ:IIVI) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

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How Does Chuck Mattera’s Compensation Compare With Similar Sized Companies?

According to our data, II-VI Incorporated has a market capitalization of US$2.3b, and pays its CEO total annual compensation worth US$5.4m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$686k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.5m.

It would therefore appear that II-VI Incorporated pays Chuck Mattera more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at II-VI, below.

NasdaqGS:IIVI CEO Compensation, March 24th 2019

Is II-VI Incorporated Growing?

II-VI Incorporated has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). It achieved revenue growth of 20% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has II-VI Incorporated Been A Good Investment?

Most shareholders would probably be pleased with II-VI Incorporated for providing a total return of 75% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We examined the amount II-VI Incorporated pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling II-VI shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.