This Is Why We Think National Research Corporation's (NASDAQ:NRC) CEO Might Get A Pay Rise Approved By Shareholders

The decent performance at National Research Corporation (NASDAQ:NRC) recently will please most shareholders as they go into the AGM coming up on 22 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

See our latest analysis for National Research

How Does Total Compensation For Mike Hays Compare With Other Companies In The Industry?

According to our data, National Research Corporation has a market capitalization of US$1.1b, and paid its CEO total annual compensation worth US$255k over the year to December 2020. We note that's an increase of 8.8% above last year. Notably, the salary which is US$127.4k, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$2.0m. This suggests that Mike Hays is paid below the industry median. Moreover, Mike Hays also holds US$288m worth of National Research stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$127k	US$127k	50%
Other	US$127k	US$106k	50%
Total Compensation	US$255k	US$234k	100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. National Research pays out 50% of remuneration in the form of a salary, significantly higher than the industry average. 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.

A Look at National Research Corporation's Growth Numbers

National Research Corporation's earnings per share (EPS) grew 12% per year over the last three years. In the last year, its revenue is up 3.5%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 National Research Corporation Been A Good Investment?

National Research Corporation has served shareholders reasonably well, with a total return of 23% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for National Research that investors should be aware of in a dynamic business environment.

Important note: National Research 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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