A Quick Analysis On Acme United's (NYSEMKT:ACU) CEO Salary

This article will reflect on the compensation paid to Walter Johnsen who has served as CEO of Acme United Corporation (NYSEMKT:ACU) since 1995. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Acme United.

View our latest analysis for Acme United

How Does Total Compensation For Walter Johnsen Compare With Other Companies In The Industry?

According to our data, Acme United Corporation has a market capitalization of US$100m, and paid its CEO total annual compensation worth US$1.1m over the year to December 2019. That's a slight decrease of 3.1% on the prior year. We note that the salary portion, which stands at US$749.1k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$571k. Hence, we can conclude that Walter Johnsen is remunerated higher than the industry median. Furthermore, Walter Johnsen directly owns US$9.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. It's interesting to note that Acme United 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.

Acme United Corporation's Growth

Acme United Corporation's earnings per share (EPS) grew 10% per year over the last three years. In the last year, its revenue is up 12%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Acme United Corporation Been A Good Investment?

With a total shareholder return of 30% over three years, Acme United Corporation shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Acme United 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. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Acme United that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

When trading Acme United or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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