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In 2008 Jim Lines was appointed CEO of Graham Corporation (NYSE:GHM). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jim Lines’s Compensation Compare With Similar Sized Companies?
Our data indicates that Graham Corporation is worth US$219m, and total annual CEO compensation is US$1.1m. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at US$435k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO compensation of that group was US$911k.
So Jim Lines is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Graham has changed over time.
Is Graham Corporation Growing?
Graham Corporation has reduced its earnings per share by an average of 72% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 12% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Graham Corporation Been A Good Investment?
Most shareholders would probably be pleased with Graham Corporation for providing a total return of 39% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Jim Lines is paid around the same as most CEOs of similar size companies.
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. Shareholders may want to check for free if Graham insiders are buying or selling shares.
If you want to buy a stock that is better than Graham, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.