Does Value Line's (NASDAQ:VALU) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Howard Brecher who has served as CEO of Value Line, Inc. (NASDAQ:VALU) since 2009. This analysis will also assess whether Value Line pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Value Line

How Does Total Compensation For Howard Brecher Compare With Other Companies In The Industry?

According to our data, Value Line, Inc. has a market capitalization of US$277m, and paid its CEO total annual compensation worth US$870k over the year to April 2020. That's a modest increase of 5.7% on the prior year. Notably, the salary which is US$650.0k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$676k. So it looks like Value Line compensates Howard Brecher in line with the median for the industry.

On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. It's interesting to note that Value Line 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.

Value Line, Inc.'s Growth

Over the past three years, Value Line, Inc. has seen its earnings per share (EPS) grow by 38% per year. Its revenue is up 8.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Value Line, Inc. Been A Good Investment?

Boasting a total shareholder return of 80% over three years, Value Line, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Value Line, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

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 1 warning sign for Value Line that investors should think about before committing capital to this stock.

Important note: Value Line 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.

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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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