Is PetMed Express, Inc.'s (NASDAQ:PETS) CEO Paid Enough Relative To Peers?

By
Simply Wall St
Published
December 10, 2019
NasdaqGS:PETS

Menderes Akdag has been the CEO of PetMed Express, Inc. (NASDAQ:PETS) since 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for PetMed Express

How Does Menderes Akdag's Compensation Compare With Similar Sized Companies?

According to our data, PetMed Express, Inc. has a market capitalization of US$455m, and paid its CEO total annual compensation worth US$858k over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at US$600k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.

A first glance this seems like a real positive for shareholders, since Menderes Akdag is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business. Shareholders might be interested in this free visualization of analyst forecasts.

You can see, below, how CEO compensation at PetMed Express has changed over time.

NasdaqGS:PETS CEO Compensation, December 10th 2019
NasdaqGS:PETS CEO Compensation, December 10th 2019

Is PetMed Express, Inc. Growing?

On average over the last three years, PetMed Express, Inc. has grown earnings per share (EPS) by 14% each year (using a line of best fit). It saw its revenue drop 4.1% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business.

Has PetMed Express, Inc. Been A Good Investment?

PetMed Express, Inc. has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

PetMed Express, Inc. is currently paying its CEO below what is normal for companies of its size.

Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Menderes Akdag is paid too much. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But it would be nice if insiders were also buying shares. So you may want to check if insiders are buying PetMed Express shares with their own money (free access).

Important note: PetMed Express may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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