Is AeroCentury Corp.'s (NYSEMKT:ACY) CEO Being Overpaid?

Michael Magnusson became the CEO of AeroCentury Corp. (NYSEMKT:ACY) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for AeroCentury

How Does Michael Magnusson's Compensation Compare With Similar Sized Companies?

According to our data, AeroCentury Corp. has a market capitalization of US$12m, and pays its CEO total annual compensation worth US$354k. (This is based on the year to December 2018). Notably, the salary of US$350k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$490k.

So Michael Magnusson receives a similar amount to the median CEO pay, amongst 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.

The graphic below shows how CEO compensation at AeroCentury has changed from year to year.

Is AeroCentury Corp. Growing?

On average over the last three years, AeroCentury Corp. has shrunk earnings per share by 76% each year (measured with a line of best fit). In the last year, its revenue is down -14%.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has AeroCentury Corp. Been A Good Investment?

Since shareholders would have lost about 14% over three years, some AeroCentury Corp. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Michael Magnusson is paid around the same as most CEOs of similar size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AeroCentury.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.