Zackary Irani has been the CEO of Biomerica, Inc. (NASDAQ:BMRA) since 1997, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Zackary Irani Compare With Other Companies In The Industry?
At the time of writing, our data shows that Biomerica, Inc. has a market capitalization of US$80m, and reported total annual CEO compensation of US$330k for the year to May 2020. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$137k.
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. That is to say, Zackary Irani is paid under the industry median. Moreover, Zackary Irani also holds US$6.8m worth of Biomerica 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 21% of total compensation represents salary, while the remainder of 79% is other remuneration. Biomerica is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Biomerica, Inc.'s Growth
Biomerica, Inc. has reduced its earnings per share by 27% a year over the last three years. Its revenue is up 30% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Biomerica, Inc. Been A Good Investment?
Boasting a total shareholder return of 109% over three years, Biomerica, Inc. has done well by shareholders. 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.
As we noted earlier, Biomerica pays its CEO lower than the norm for similar-sized companies belonging to the same industry. And as we saw, revenue growth and shareholder returns have been rising But it's noteworthy that EPS growth is in the red during the same time frame. Negative EPS growth notwithstanding, we can conclude that on this analysis the CEO compensation seems pretty sound.
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 2 warning signs for Biomerica that investors should think about before committing capital to this stock.
Important note: Biomerica 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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