Jeffrey Gill became the CEO of Sypris Solutions, Inc. (NASDAQ:SYPR) in 2016, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Sypris Solutions
Comparing Sypris Solutions, Inc.’s CEO Compensation With the industry
According to our data, Sypris Solutions, Inc. has a market capitalization of US$23m, and paid its CEO total annual compensation worth US$635k over the year to December 2019. We note that’s a small decrease of 5.5% on last year. We note that the salary portion, which stands at US$495.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$579k. So it looks like Sypris Solutions compensates Jeffrey Gill in line with the median for the industry. What’s more, Jeffrey Gill holds US$3.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$495k | US$495k | 78% |
| Other | US$140k | US$177k | 22% |
| Total Compensation | US$635k | US$672k | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. According to our research, Sypris Solutions has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.
A Look at Sypris Solutions, Inc.’s Growth Numbers
Sypris Solutions, Inc. has reduced its earnings per share by 16% a year over the last three years. Its revenue is up 3.5% over the last year.
The decline in earnings is a bit concerning. The modest increase in revenue in the last year isn’t enough to make us 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. While we don’t have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Sypris Solutions, Inc. Been A Good Investment?
With a three year total loss of 39% for the shareholders, Sypris Solutions, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary…
As previously discussed, Jeffrey is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That’s why we did some digging and identified 3 warning signs for Sypris Solutions that you should be aware of before investing.
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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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