Is Limbach Holdings, Inc.’s (NASDAQ:LMB) CEO Being Overpaid?

Charlie Bacon has been the CEO of Limbach Holdings, Inc. (NASDAQ:LMB) since 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Limbach Holdings

How Does Charlie Bacon’s Compensation Compare With Similar Sized Companies?

According to our data, Limbach Holdings, Inc. has a market capitalization of US$31m, and paid its CEO total annual compensation worth US$854k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$618k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$523k.

As you can see, Charlie Bacon is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Limbach Holdings, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Limbach Holdings has changed over time.

NasdaqCM:LMB CEO Compensation, February 6th 2020
NasdaqCM:LMB CEO Compensation, February 6th 2020

Is Limbach Holdings, Inc. Growing?

On average over the last three years, Limbach Holdings, Inc. has shrunk earnings per share by 2.2% each year (measured with a line of best fit). In the last year, its revenue is up 7.5%.

In the last three years the company has failed to grow earnings per share. The fairly low revenue growth fails to impress given that the earnings per share is down. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Limbach Holdings, Inc. Been A Good Investment?

With a three year total loss of 71%, Limbach Holdings, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount Limbach Holdings, Inc. 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.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Limbach Holdings (free visualization of insider trades).

If you want to buy a stock that is better than Limbach Holdings, this free list of high return, low debt companies is a great place to look.

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.

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