Charlie Bacon became the CEO of Limbach Holdings, Inc. (NASDAQ:LMB) 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 assess whether Limbach Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Limbach Holdings
How Does Total Compensation For Charlie Bacon Compare With Other Companies In The Industry?
Our data indicates that Limbach Holdings, Inc. has a market capitalization of US$107m, and total annual CEO compensation was reported as US$821k for the year to December 2019. That's a slightly lower by 3.9% over the previous year. In particular, the salary of US$618.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$883k. This suggests that Limbach Holdings remunerates its CEO largely in line with the industry average. What's more, Charlie Bacon holds US$5.5m 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$618k | US$618k | 75% |
| Other | US$203k | US$236k | 25% |
| Total Compensation | US$821k | US$854k | 100% |
On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. Limbach Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Limbach Holdings, Inc.'s Growth Numbers
Over the past three years, Limbach Holdings, Inc. has seen its earnings per share (EPS) grow by 72% per year. Its revenue is up 1.9% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Limbach Holdings, Inc. Been A Good Investment?
With a three year total loss of 2.1% for the shareholders, Limbach Holdings, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As previously discussed, Charlie is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. 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.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Limbach Holdings you should be aware of, and 1 of them shouldn't be ignored.
Switching gears from Limbach Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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About NasdaqCM:LMB
Limbach Holdings
Operates as a building systems solution company in the United States.
Flawless balance sheet with solid track record.
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