How Is Value Line's (NASDAQ:VALU) CEO Paid Relative To 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

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$264m, 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. In particular, the salary of US$650.0k, makes up a huge portion of the total compensation being paid to the CEO.

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$1.4m. That is to say, Howard Brecher is paid under the industry median.

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Value Line is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Value Line, Inc.'s Growth Numbers

Value Line, Inc. has seen its earnings per share (EPS) increase by 40% a year over the past three years. It achieved revenue growth of 11% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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?

Most shareholders would probably be pleased with Value Line, Inc. for providing a total return of 71% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we touched on above, Value Line, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Considering robust EPS growth, we believe Howard to be modestly paid. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Value Line that investors should look into moving forward.

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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