Zackary Irani became the CEO of Biomerica, Inc. (NASDAQ:BMRA) in 1997. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Zackary Irani’s Compensation Compare With Similar Sized Companies?
Our data indicates that Biomerica, Inc. is worth US$30m, and total annual CEO compensation was reported as US$329k for the year to May 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$137k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$509k.
Most shareholders would consider it a positive that Zackary Irani takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Biomerica has changed from year to year.
Is Biomerica, Inc. Growing?
Over the last three years Biomerica, Inc. has shrunk its earnings per share by an average of 15% per year (measured with a line of best fit). In the last year, its revenue is down 5.0%.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Biomerica, Inc. Been A Good Investment?
Biomerica, Inc. has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Biomerica, Inc. is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Zackary Irani is under the median of a group of similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. There is room for improved company performance, but we don’t see the CEO pay as a big issue here. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Biomerica (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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