In 2016 Lloyd Hoffman was appointed CEO of Alpha Pro Tech, Ltd. (NYSEMKT:APT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Lloyd Hoffman’s Compensation Compare With Similar Sized Companies?
Our data indicates that Alpha Pro Tech, Ltd. is worth US$52m, and total annual CEO compensation is US$635k. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$575k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$297k.
As you can see, Lloyd Hoffman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Alpha Pro Tech, Ltd. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Alpha Pro Tech has changed over time.
Is Alpha Pro Tech, Ltd. Growing?
Over the last three years Alpha Pro Tech, Ltd. has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit). In the last year, its revenue is up 3.8%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Alpha Pro Tech, Ltd. Been A Good Investment?
Most shareholders would probably be pleased with Alpha Pro Tech, Ltd. for providing a total return of 131% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Alpha Pro Tech, Ltd. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Alpha Pro Tech insiders are buying or selling shares.
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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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. Thank you for reading.