Stock Analysis

What Can We Conclude About Sypris Solutions' (NASDAQ:SYPR) CEO Pay?

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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.

See 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$29m, 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. Notably, the salary which is US$495.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$562k. From this we gather that Jeffrey Gill is paid around the median for CEOs in the industry. Moreover, Jeffrey Gill also holds US$4.1m worth of Sypris Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary US$495k US$495k 78%
Other US$140k US$177k 22%
Total CompensationUS$635k US$672k100%

On an industry level, roughly 20% of total compensation represents salary and 80% 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.

NasdaqGM:SYPR CEO Compensation November 18th 2020

A Look at Sypris Solutions, Inc.'s Growth Numbers

Over the past three years, Sypris Solutions, Inc. has seen its earnings per share (EPS) grow by 72% per year. In the last year, its revenue is down 7.5%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Sypris Solutions, Inc. Been A Good Investment?

Since shareholders would have lost about 6.1% over three years, some Sypris Solutions, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Jeffrey is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 2 which are a bit concerning) in Sypris Solutions we think you should know about.

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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