We Think Some Shareholders May Hesitate To Increase Nortech Systems Incorporated's (NASDAQ:NSYS) CEO Compensation

Key Insights

• Nortech Systems to hold its Annual General Meeting on 15th of May
• Salary of US$520.0k is part of CEO Jay Miller's total remuneration
• The total compensation is 71% higher than the average for the industry
• Over the past three years, Nortech Systems' EPS grew by 49% and over the past three years, the total shareholder return was 170%

CEO Jay Miller has done a decent job of delivering relatively good performance at Nortech Systems Incorporated (NASDAQ:NSYS) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 15th of May. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Nortech Systems

How Does Total Compensation For Jay Miller Compare With Other Companies In The Industry?

At the time of writing, our data shows that Nortech Systems Incorporated has a market capitalization of US$42m, and reported total annual CEO compensation of US$820k for the year to December 2023. That's a notable decrease of 20% on last year. Notably, the salary which is US$520.0k, represents most of the total compensation being paid.

In comparison with other companies in the American Electronic industry with market capitalizations under US$200m, the reported median total CEO compensation was US$479k. Accordingly, our analysis reveals that Nortech Systems Incorporated pays Jay Miller north of the industry median. What's more, Jay Miller holds US$430k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$520k	US$498k	63%
Other	US$300k	US$532k	37%
Total Compensation	US$820k	US$1.0m	100%

Talking in terms of the industry, salary represented approximately 31% of total compensation out of all the companies we analyzed, while other remuneration made up 69% of the pie. Nortech Systems is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Nortech Systems Incorporated's Growth

Nortech Systems Incorporated's earnings per share (EPS) grew 49% per year over the last three years. It achieved revenue growth of 3.9% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nortech Systems Incorporated Been A Good Investment?

We think that the total shareholder return of 170%, over three years, would leave most Nortech Systems Incorporated shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

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 Nortech Systems 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.