P. Debney has been the CEO of American Outdoor Brands Corporation (NASDAQ:AOBC) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does P. Debney’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that American Outdoor Brands Corporation has a market cap of US$529m, and reported total annual CEO compensation of US$3.8m for the year to April 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$749k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.7m.
Thus we can conclude that P. Debney receives more in total compensation than the median of a group of companies in the same market, and of similar size to American Outdoor Brands Corporation. However, this doesn’t necessarily mean the pay 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.
The graphic below shows how CEO compensation at American Outdoor Brands has changed from year to year.
Is American Outdoor Brands Corporation Growing?
On average over the last three years, American Outdoor Brands Corporation has shrunk earnings per share by 85% each year (measured with a line of best fit). It saw its revenue drop 2.2% over the last year.
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 American Outdoor Brands Corporation Been A Good Investment?
Since shareholders would have lost about 53% over three years, some American Outdoor Brands Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount American Outdoor Brands Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling American Outdoor Brands shares (free trial).
Important note: American Outdoor Brands may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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