Shareholders will probably not be too impressed with the underwhelming results at AstroNova, Inc. (NASDAQ:ALOT) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 08 June 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
Comparing AstroNova, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that AstroNova, Inc. has a market capitalization of US$118m, and reported total annual CEO compensation of US$1.2m for the year to January 2021. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$410k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$975k. From this we gather that Greg Woods is paid around the median for CEOs in the industry. Moreover, Greg Woods also holds US$2.0m worth of AstroNova stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 27% of total compensation represents salary and 73% is other remuneration. It's interesting to note that AstroNova pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at AstroNova, Inc.'s Growth Numbers
Over the last three years, AstroNova, Inc. has shrunk its earnings per share by 28% per year. In the last year, its revenue is down 13%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has AstroNova, Inc. Been A Good Investment?
Since shareholders would have lost about 3.6% over three years, some AstroNova, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
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 2 warning signs for AstroNova (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: AstroNova is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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