Chris Sharng is the CEO of Natural Health Trends Corp. (NASDAQ:NHTC). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Chris Sharng’s Compensation Compare With Similar Sized Companies?
According to our data, Natural Health Trends Corp. has a market capitalization of US$77m, and pays its CEO total annual compensation worth US$1.5m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$470k.
As you can see, Chris Sharng is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Natural Health Trends Corp. is paying too much. 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 Natural Health Trends has changed from year to year.
Is Natural Health Trends Corp. Growing?
On average over the last three years, Natural Health Trends Corp. has shrunk earnings per share by 33% each year (measured with a line of best fit). Its revenue is down -16% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Natural Health Trends Corp. Been A Good Investment?
Given the total loss of 74% over three years, many shareholders in Natural Health Trends Corp. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by Natural Health Trends Corp., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if Natural Health Trends insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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