What We Learned About CRA International’s (NASDAQ:CRAI) CEO Compensation

Paul Maleh has been the CEO of CRA International, Inc. (NASDAQ:CRAI) since 2009, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for CRA International

How Does Total Compensation For Paul Maleh Compare With Other Companies In The Industry?

At the time of writing, our data shows that CRA International, Inc. has a market capitalization of US$339m, and reported total annual CEO compensation of US$3.3m for the year to December 2019. Notably, that’s an increase of 11% over the year before. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$785k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.6m. This suggests that CRA International remunerates its CEO largely in line with the industry average. Moreover, Paul Maleh also holds US$5.8m worth of CRA International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. It’s interesting to note that CRA International pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.

CRA International, Inc.’s Growth

CRA International, Inc.’s earnings per share (EPS) grew 26% per year over the last three years. Its revenue is up 11% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It’s a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 CRA International, Inc. Been A Good Investment?

CRA International, Inc. has served shareholders reasonably well, with a total return of 23% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude…

As we noted earlier, CRA International pays its CEO in line with similar-sized companies belonging to the same industry. However, it’s admirable that over the last three years, earnings growth for the company has been impressive, though the same can’t be said for investor returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier 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 1 warning sign for CRA International that you should be aware of before investing.

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