How Much Did SIFCO Industries' (NYSEMKT:SIF) CEO Pocket Last Year?

Pete Knapper became the CEO of SIFCO Industries, Inc. (NYSEMKT:SIF) in 2016, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for SIFCO Industries

Comparing SIFCO Industries, Inc.'s CEO Compensation With the industry

Our data indicates that SIFCO Industries, Inc. has a market capitalization of US$47m, and total annual CEO compensation was reported as US$656k for the year to September 2020. We note that's a decrease of 17% compared to last year. In particular, the salary of US$400.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$470k. Hence, we can conclude that Pete Knapper is remunerated higher than the industry median. What's more, Pete Knapper holds US$1.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. SIFCO Industries pays out 61% of remuneration in the form of a salary, significantly higher than the industry average. 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.

SIFCO Industries, Inc.'s Growth

Over the past three years, SIFCO Industries, Inc. has seen its earnings per share (EPS) grow by 67% per year. In the last year, its revenue is up 1.0%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has SIFCO Industries, Inc. Been A Good Investment?

With a total shareholder return of 21% over three years, SIFCO Industries, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, SIFCO Industries pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed us with its EPS growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for SIFCO Industries you should be aware of, and 2 of them are a bit unpleasant.

Important note: SIFCO Industries is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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