Why Sharps Compliance Corp.'s (NASDAQ:SMED) CEO Pay Matters To You

David Tusa has been the CEO of Sharps Compliance Corp. (NASDAQ:SMED) since 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Sharps Compliance

How Does David Tusa's Compensation Compare With Similar Sized Companies?

According to our data, Sharps Compliance Corp. has a market capitalization of US$87m, and paid its CEO total annual compensation worth US$864k over the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at US$350k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$571k.

It would therefore appear that Sharps Compliance Corp. pays David Tusa more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Sharps Compliance has changed from year to year.

Is Sharps Compliance Corp. Growing?

On average over the last three years, Sharps Compliance Corp. has grown earnings per share (EPS) by 108% each year (using a line of best fit). Its revenue is up 18% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Sharps Compliance Corp. Been A Good Investment?

Sharps Compliance Corp. has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We examined the amount Sharps Compliance Corp. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for Sharps Compliance that investors should be aware of in a dynamic business environment.

If you want to buy a stock that is better than Sharps Compliance, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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