How Is ADDvantage Technologies Group's (NASDAQ:AEY) CEO Paid Relative To Peers?

Joe Hart has been the CEO of ADDvantage Technologies Group, Inc. (NASDAQ:AEY) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for ADDvantage Technologies Group.

See our latest analysis for ADDvantage Technologies Group

How Does Total Compensation For Joe Hart Compare With Other Companies In The Industry?

At the time of writing, our data shows that ADDvantage Technologies Group, Inc. has a market capitalization of US$35m, and reported total annual CEO compensation of US$509k for the year to September 2020. Notably, that's an increase of 22% over the year before. We note that the salary portion, which stands at US$290.8k 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$361k. Accordingly, our analysis reveals that ADDvantage Technologies Group, Inc. pays Joe Hart north of the industry median. What's more, Joe Hart holds US$569k worth of shares in the company in their own name.

On an industry level, roughly 34% of total compensation represents salary and 66% is other remuneration. It's interesting to note that ADDvantage Technologies Group pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at ADDvantage Technologies Group, Inc.'s Growth Numbers

ADDvantage Technologies Group, Inc. has reduced its earnings per share by 71% a year over the last three years. Its revenue is down 9.1% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 ADDvantage Technologies Group, Inc. Been A Good Investment?

Most shareholders would probably be pleased with ADDvantage Technologies Group, Inc. for providing a total return of 96% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we noted earlier, ADDvantage Technologies Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So while we would not say that Joe is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for ADDvantage Technologies Group (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

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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