Should You Worry About Emerson Radio Corp.’s (NYSEMKT:MSN) CEO Pay Cheque?

Duncan Hon became the CEO of Emerson Radio Corp. (NYSEMKT:MSN) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Emerson Radio

How Does Duncan Hon’s Compensation Compare With Similar Sized Companies?

According to our data, Emerson Radio Corp. has a market capitalization of US$18m, and paid its CEO total annual compensation worth US$545k over the year to March 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$545k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$521k.

That means Duncan Hon receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Emerson Radio, below.

AMEX:MSN CEO Compensation, February 7th 2020
AMEX:MSN CEO Compensation, February 7th 2020

Is Emerson Radio Corp. Growing?

On average over the last three years, Emerson Radio Corp. has shrunk earnings per share by 48% each year (measured with a line of best fit). In the last year, its revenue is down 45%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Although we don’t have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Emerson Radio Corp. Been A Good Investment?

Given the total loss of 24% over three years, many shareholders in Emerson Radio Corp. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Duncan Hon is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don’t think the CEO is underpaid! Whatever your view on compensation, you might want to check if insiders are buying or selling Emerson Radio shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.