A Quick Analysis On Allied Healthcare Products' (NASDAQ:AHPI) CEO Compensation

By
Simply Wall St
Published
February 07, 2021
NasdaqCM:AHPI

Earl Refsland has been the CEO of Allied Healthcare Products, Inc. (NASDAQ:AHPI) since 1999, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Allied Healthcare Products.

Check out our latest analysis for Allied Healthcare Products

How Does Total Compensation For Earl Refsland Compare With Other Companies In The Industry?

Our data indicates that Allied Healthcare Products, Inc. has a market capitalization of US$27m, and total annual CEO compensation was reported as US$502k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is US$429.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$554k. So it looks like Allied Healthcare Products compensates Earl Refsland in line with the median for the industry. What's more, Earl Refsland holds US$1.3m worth of shares in the company in their own name.

Component20202019Proportion (2020)
Salary US$429k US$429k 86%
Other US$73k US$73k 14%
Total CompensationUS$502k US$502k100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Allied Healthcare Products is paying a higher share of its remuneration through a salary in comparison to the overall 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.

ceo-compensation
NasdaqCM:AHPI CEO Compensation February 8th 2021

A Look at Allied Healthcare Products, Inc.'s Growth Numbers

Allied Healthcare Products, Inc. has reduced its earnings per share by 6.0% a year over the last three years. In the last year, its revenue is up 6.3%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Allied Healthcare Products, Inc. Been A Good Investment?

We think that the total shareholder return of 256%, over three years, would leave most Allied Healthcare Products, Inc. shareholders smiling. 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 previously discussed, Earl is compensated close to the median for companies of its size, and which belong to the same industry. Some investors may take issue with this, especially considering shrinking EPS for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We're not saying CEO compensation is too generous, but shrinking EPS is undoubtedly an issue that will have to be addressed.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Allied Healthcare Products (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Allied Healthcare Products, 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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