Equus Total Return, Inc.'s (NYSE:EQS) CEO Might Not Expect Shareholders To Be So Generous This Year

Shareholders will probably not be too impressed with the underwhelming results at Equus Total Return, Inc. (NYSE:EQS) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27 May 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Equus Total Return

Comparing Equus Total Return, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Equus Total Return, Inc. has a market capitalization of US$26m, and reported total annual CEO compensation of US$1.1m for the year to December 2020. We note that's an increase of 32% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$383k.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$376k. Hence, we can conclude that John Hardy is remunerated higher than the industry median. Moreover, John Hardy also holds US$7.1m worth of Equus Total Return stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Equus Total Return is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Equus Total Return, Inc.'s Growth Numbers

Over the last three years, Equus Total Return, Inc. has shrunk its earnings per share by 99% per year. It saw its revenue drop 51% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Equus Total Return, Inc. Been A Good Investment?

Given the total shareholder loss of 21% over three years, many shareholders in Equus Total Return, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Equus Total Return (2 are a bit concerning!) that you should be aware of before investing here.

Switching gears from Equus Total Return, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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