The CEO of Natural Health Trends Corp. (NASDAQ:NHTC) is Chris T. Sharng, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Natural Health Trends pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Natural Health Trends Corp.'s CEO Compensation With the industry
According to our data, Natural Health Trends Corp. has a market capitalization of US$63m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2019. We note that's a decrease of 9.5% compared to last year. We note that the salary portion, which stands at US$1.00m constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$219k. Accordingly, our analysis reveals that Natural Health Trends Corp. pays Chris T. Sharng north of the industry median. What's more, Chris T. Sharng holds US$5.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. According to our research, Natural Health Trends has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Natural Health Trends Corp.'s Growth
Over the last three years, Natural Health Trends Corp. has shrunk its earnings per share by 85% per year. It saw its revenue drop 49% over the last year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Natural Health Trends Corp. Been A Good Investment?
Given the total shareholder loss of 59% over three years, many shareholders in Natural Health Trends Corp. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Chris T. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is a bit unpleasant) in Natural Health Trends we think you should know about.
Important note: Natural Health Trends 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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