This article will reflect on the compensation paid to Ken Globus who has served as CEO of United-Guardian, Inc. (NASDAQ:UG) since 2009. This analysis will also assess whether United-Guardian pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for United-Guardian
Comparing United-Guardian, Inc.'s CEO Compensation With the industry
According to our data, United-Guardian, Inc. has a market capitalization of US$66m, and paid its CEO total annual compensation worth US$439k over the year to December 2019. That's just a smallish increase of 3.9% on last year. Notably, the salary which is US$276.5k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$275k. Hence, we can conclude that Ken Globus is remunerated higher than the industry median. Moreover, Ken Globus also holds US$19m worth of United-Guardian stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$276k | US$273k | 63% |
| Other | US$162k | US$149k | 37% |
| Total Compensation | US$439k | US$422k | 100% |
Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Although there is a difference in how total compensation is set, United-Guardian more or less reflects the market in terms of setting the salary. 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 United-Guardian, Inc.'s Growth Numbers
Over the past three years, United-Guardian, Inc. has seen its earnings per share (EPS) grow by 4.5% per year. Its revenue is down 1.0% over the previous year.
We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 United-Guardian, Inc. Been A Good Investment?
Given the total shareholder loss of 14% over three years, many shareholders in United-Guardian, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, United-Guardian pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for United-Guardian, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look great when you consider Ken is taking home compensation north of the industry average. Taking all this into account, it could be hard to get shareholder support for giving Ken a raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for United-Guardian that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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About NasdaqGM:UG
United-Guardian
Manufactures and markets cosmetic ingredients, pharmaceuticals, medical lubricants, and proprietary specialty industrial products in the United States and internationally The company offers cosmetic ingredients, including LUBRAJEL, a line of water-based gel formulation for sensory enhancement, lubrication, and texture to personal care products; LUBRAJEL NATURAL for skin moisturizing; LUBRAJEL MARINE that develops natural products using naturally derived polymers; LUBRAJEL OlL NATURAL, which makes luxuriant textures without adding viscosity; LUBRAJEL TERRA, a multifunctional, moisturizing hydrogel products; LUBRASIL II SB, a formulation of LUBRAJEL; LUBRAJEL II XD; B-122, a powdered lubricant used in the manufacture of pressed powders, eyeliners, rouges, and industrial products; and ORCHID COMPLEX, an oil-soluble base for extract of fresh orchids used in fragrance products, such as perfumes and toiletries.
Flawless balance sheet with solid track record and pays a dividend.
