Does Heritage-Crystal Clean's (NASDAQ:HCCI) CEO Salary Compare Well With Industry Peers?

Brian Recatto became the CEO of Heritage-Crystal Clean, Inc (NASDAQ:HCCI) in 2017, 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.

See our latest analysis for Heritage-Crystal Clean

How Does Total Compensation For Brian Recatto Compare With Other Companies In The Industry?

At the time of writing, our data shows that Heritage-Crystal Clean, Inc has a market capitalization of US$469m, and reported total annual CEO compensation of US$2.3m for the year to December 2019. We note that's a small decrease of 5.7% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$437k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$3.9m. Accordingly, Heritage-Crystal Clean pays its CEO under the industry median. Furthermore, Brian Recatto directly owns US$10m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. In Heritage-Crystal Clean's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Heritage-Crystal Clean, Inc's Growth Numbers

Over the last three years, Heritage-Crystal Clean, Inc has shrunk its earnings per share by 40% per year. It saw its revenue drop 4.6% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Heritage-Crystal Clean, Inc Been A Good Investment?

Given the total shareholder loss of 6.2% over three years, many shareholders in Heritage-Crystal Clean, Inc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Heritage-Crystal Clean, Inc is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Heritage-Crystal Clean that you should be aware of before investing.

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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