In 2016 John Elliott was appointed CEO of Gencor Industries, Inc. (NASDAQ:GENC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does John Elliott’s Compensation Compare With Similar Sized Companies?
According to our data, Gencor Industries, Inc. has a market capitalization of US$178m, and paid its CEO total annual compensation worth US$451k over the year to September 2018. Notably, the salary of US$450k is the vast majority of the CEO compensation. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less 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 Gencor Industries has changed from year to year.
Is Gencor Industries, Inc. Growing?
Gencor Industries, Inc. has increased its earnings per share (EPS) by an average of 30% a year, over the last three years (using a line of best fit). In the last year, its revenue is down -9.6%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
Has Gencor Industries, Inc. Been A Good Investment?
With a total shareholder return of 13% over three years, Gencor Industries, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Gencor Industries, Inc. remunerates its CEO below most similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn’t mean that John Elliott is paid too much. It’s good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. So you may want to check if insiders are buying Gencor Industries shares with their own money (free access).
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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