This article will reflect on the compensation paid to Maryjo Cohen who has served as CEO of National Presto Industries, Inc. (NYSE:NPK) since 1994. This analysis will also assess whether National Presto Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Maryjo Cohen Compare With Other Companies In The Industry?
At the time of writing, our data shows that National Presto Industries, Inc. has a market capitalization of US$582m, and reported total annual CEO compensation of US$722k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$595.0k, makes up a huge portion of the total compensation being paid to the CEO.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$2.0m. That is to say, Maryjo Cohen is paid under the industry median. Moreover, Maryjo Cohen also holds US$140m worth of National Presto Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. It's interesting to note that National Presto Industries pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
National Presto Industries, Inc.'s Growth
Over the last three years, National Presto Industries, Inc. has not seen its earnings per share change much, though there is a slight positive movement. In the last year, its revenue is up 7.5%.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has National Presto Industries, Inc. Been A Good Investment?
Given the total shareholder loss of 12% over three years, many shareholders in National Presto Industries, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Maryjo is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But then, EPS growth is lacking and so are the returns to shareholders. So while we would not say that Maryjo is generously paid, it would be good to see an improvement in business performance before there is talk about a raise.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for National Presto Industries that investors should be aware of in a dynamic business environment.
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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