Mike Popielec became the CEO of Ultralife Corporation (NASDAQ:ULBI) in 2010, 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 Ultralife pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Ultralife Corporation’s CEO Compensation With the industry
Our data indicates that Ultralife Corporation has a market capitalization of US$102m, and total annual CEO compensation was reported as US$811k for the year to December 2019. Notably, that’s a decrease of 15% over the year before. We note that the salary portion, which stands at US$526.6k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$463k. Accordingly, our analysis reveals that Ultralife Corporation pays Mike Popielec north of the industry median. What’s more, Mike Popielec holds US$1.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 31% of total compensation out of all the companies we analyzed, while other remuneration made up 69% of the pie. It’s interesting to note that Ultralife pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Ultralife Corporation’s Growth Numbers
Ultralife Corporation’s earnings per share (EPS) grew 5.1% per year over the last three years. It achieved revenue growth of 37% over the last year.
It’s great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. We’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Ultralife Corporation Been A Good Investment?
Given the total shareholder loss of 10% over three years, many shareholders in Ultralife Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Mike is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Ultralife have arguably been worse, over the last three years. And the situation doesn’t look all that good when you see Mike is remunerated higher than the industry average. Taking all this into account, it could be hard to get shareholder support for giving Mike a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We’ve identified 2 warning signs for Ultralife that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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