How Much Is Virco Mfg. Corporation (NASDAQ:VIRC) Paying Its CEO?

Robert Virtue became the CEO of Virco Mfg. Corporation (NASDAQ:VIRC) in 1988, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Virco Mfg.

View our latest analysis for Virco Mfg

How Does Total Compensation For Robert Virtue Compare With Other Companies In The Industry?

According to our data, Virco Mfg. Corporation has a market capitalization of US$41m, and paid its CEO total annual compensation worth US$463k over the year to January 2020. We note that's an increase of 40% above last year. In particular, the salary of US$318.7k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$517k. This suggests that Virco Mfg remunerates its CEO largely in line with the industry average. Furthermore, Robert Virtue directly owns US$9.6m 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. It's interesting to note that Virco Mfg pays out a greater portion of remuneration through salary, compared to the 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.

Virco Mfg. Corporation's Growth

Over the past three years, Virco Mfg. Corporation has seen its earnings per share (EPS) grow by 57% per year. In the last year, its revenue is down 16%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Virco Mfg. Corporation Been A Good Investment?

Given the total shareholder loss of 44% over three years, many shareholders in Virco Mfg. Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Virco Mfg pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is potentially serious) in Virco Mfg we think you should know about.

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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