Shareholders May Be A Bit More Conservative With JanOne Inc.'s (NASDAQ:JAN) CEO Compensation For Now

Key Insights

• JanOne will host its Annual General Meeting on 9th of October
• CEO Tony Isaac's total compensation includes salary of US$550.3k
• Total compensation is similar to the industry average
• JanOne's three-year loss to shareholders was 90% while its EPS grew by 110% over the past three years

The underwhelming share price performance of JanOne Inc. (NASDAQ:JAN) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 9th of October. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for JanOne

How Does Total Compensation For Tony Isaac Compare With Other Companies In The Industry?

At the time of writing, our data shows that JanOne Inc. has a market capitalization of US$1.7m, and reported total annual CEO compensation of US$625k for the year to December 2022. That's a notable increase of 14% on last year. We note that the salary portion, which stands at US$550.3k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the American Commercial Services industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$664k. So it looks like JanOne compensates Tony Isaac in line with the median for the industry. Furthermore, Tony Isaac directly owns US$93k worth of shares in the company.

Component	2022	2022	Proportion (2022)
Salary	US$550k	US$550k	88%
Other	US$75k	-	12%
Total Compensation	US$625k	US$550k	100%

Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. JanOne is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

JanOne Inc.'s Growth

Over the past three years, JanOne Inc. has seen its earnings per share (EPS) grow by 110% per year. It achieved revenue growth of 73% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has JanOne Inc. Been A Good Investment?

With a total shareholder return of -90% over three years, JanOne Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for JanOne (2 can't be ignored!) that you should be aware of before investing here.

Important note: JanOne 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.