A Quick Analysis On Ocean Bio-Chem's (NASDAQ:OBCI) CEO Salary

Peter Dornau has been the CEO of Ocean Bio-Chem, Inc. (NASDAQ:OBCI) since 1973, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Ocean Bio-Chem pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Ocean Bio-Chem

How Does Total Compensation For Peter Dornau Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ocean Bio-Chem, Inc. has a market capitalization of US$118m, and reported total annual CEO compensation of US$294k for the year to December 2019. That's a slightly lower by 5.7% over the previous year. We note that the salary portion, which stands at US$199.5k 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$291k. So it looks like Ocean Bio-Chem compensates Peter Dornau in line with the median for the industry. Moreover, Peter Dornau also holds US$60m worth of Ocean Bio-Chem stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. Ocean Bio-Chem is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Ocean Bio-Chem, Inc.'s Growth

Ocean Bio-Chem, Inc. has seen its earnings per share (EPS) increase by 49% a year over the past three years. Its revenue is up 27% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Ocean Bio-Chem, Inc. Been A Good Investment?

Boasting a total shareholder return of 209% over three years, Ocean Bio-Chem, 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.

In Summary...

As we touched on above, Ocean Bio-Chem, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Peter is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Ocean Bio-Chem that you should be aware of before investing.

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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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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