Is AMCON Distributing Company’s (NYSEMKT:DIT) CEO Being Overpaid?

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Chris Atayan became the CEO of AMCON Distributing Company (NYSEMKT:DIT) in 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for AMCON Distributing

How Does Chris Atayan’s Compensation Compare With Similar Sized Companies?

Our data indicates that AMCON Distributing Company is worth US$56m, and total annual CEO compensation is US$2.2m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$553k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$300k.

Thus we can conclude that Chris Atayan receives more in total compensation than the median of a group of companies in the same market, and of similar size to AMCON Distributing Company. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at AMCON Distributing has changed over time.

AMEX:DIT CEO Compensation February 13th 19
AMEX:DIT CEO Compensation February 13th 19

Is AMCON Distributing Company Growing?

Over the last three years AMCON Distributing Company has shrunk its earnings per share by an average of 29% per year (measured with a line of best fit). In the last year, its revenue is up 7.1%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AMCON Distributing Company Been A Good Investment?

AMCON Distributing Company has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We examined the amount AMCON Distributing Company pays its CEO, and compared it to the amount paid by 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.

While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling AMCON Distributing (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.