Paul Arling has been the CEO of Universal Electronics Inc. (NASDAQ:UEIC) since 2000. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Universal Electronics
How Does Paul Arling’s Compensation Compare With Similar Sized Companies?
Our data indicates that Universal Electronics Inc. is worth US$445m, and total annual CEO compensation is US$2.4m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$830k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO compensation was US$1.6m.
It would therefore appear that Universal Electronics Inc. pays Paul Arling more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Universal Electronics has changed from year to year.
Is Universal Electronics Inc. Growing?
On average over the last three years, Universal Electronics Inc. has shrunk earnings per share by 59% each year (measured with a line of best fit). In the last year, its revenue is down -2.2%.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Universal Electronics Inc. Been A Good Investment?
Given the total loss of 50% over three years, many shareholders in Universal Electronics Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We examined the amount Universal Electronics Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Universal Electronics shares with their own money (free access).
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.