Jeffrey Gill became the CEO of Sypris Solutions, Inc. (NASDAQ:SYPR) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jeffrey Gill’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Sypris Solutions, Inc. has a market cap of US$20m, and is paying total annual CEO compensation of US$2.0m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$495k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$497k.
It would therefore appear that Sypris Solutions, Inc. pays Jeffrey Gill 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 Sypris Solutions has changed from year to year.
Is Sypris Solutions, Inc. Growing?
Over the last three years Sypris Solutions, Inc. has shrunk its earnings per share by an average of 21% per year (measured with a line of best fit). In the last year, its revenue is up 3.9%.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Has Sypris Solutions, Inc. Been A Good Investment?
With a three year total loss of 6.0%, Sypris Solutions, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Sypris Solutions, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Sypris Solutions 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.
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