In 2006 G. Lynch was appointed CEO of Northern Technologies International Corporation (NASDAQ:NTIC). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does G. Lynch’s Compensation Compare With Similar Sized Companies?
According to our data, Northern Technologies International Corporation has a market capitalization of US$133m, and paid its CEO total annual compensation worth US$873k over the year to August 2019. That’s a modest increase of 1.3% on the prior year year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$429k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$515k.
It would therefore appear that Northern Technologies International Corporation pays G. Lynch more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Northern Technologies International has changed from year to year.
Is Northern Technologies International Corporation Growing?
Over the last three years Northern Technologies International Corporation has grown its earnings per share (EPS) by an average of 49% per year (using a line of best fit). Its revenue is up 4.3% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Northern Technologies International Corporation Been A Good Investment?
I think that the total shareholder return of 98%, over three years, would leave most Northern Technologies International Corporation shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Northern Technologies International Corporation 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Northern Technologies International (free visualization of insider trades).
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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