Is National Presto Industries, Inc. (NYSE:NPK) Overpaying Its CEO?

Maryjo Cohen has been the CEO of National Presto Industries, Inc. (NYSE:NPK) since 1994. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for National Presto Industries

How Does Maryjo Cohen’s Compensation Compare With Similar Sized Companies?

According to our data, National Presto Industries, Inc. has a market capitalization of US$554m, and paid its CEO total annual compensation worth US$719k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$594k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$2.1m.

Most shareholders would consider it a positive that Maryjo Cohen takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.

You can see, below, how CEO compensation at National Presto Industries has changed over time.

NYSE:NPK CEO Compensation, March 14th 2020
NYSE:NPK CEO Compensation, March 14th 2020

Is National Presto Industries, Inc. Growing?

On average over the last three years, National Presto Industries, Inc. has shrunk earnings per share by 7.1% each year (measured with a line of best fit). Its revenue is down 4.6% over 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has National Presto Industries, Inc. Been A Good Investment?

Since shareholders would have lost about 5.0% over three years, some National Presto Industries, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

It looks like National Presto Industries, Inc. pays its CEO less than similar sized companies.

The compensation paid to Maryjo Cohen is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we’d stop short of saying the CEO pay is too high, but we don’t think shareholders would want to see a pay rise before business performance improves. Looking into other areas, we’ve picked out 1 warning sign for National Presto Industries that investors should think about before committing capital to this stock.

Important note: National Presto Industries 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.

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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