Increases to RF Industries, Ltd.'s (NASDAQ:RFIL) CEO Compensation Might Cool off for now

Key Insights

• RF Industries will host its Annual General Meeting on 10th of September
• Salary of US$400.0k is part of CEO Rob Dawson's total remuneration
• Total compensation is 104% above industry average
• Over the past three years, RF Industries' EPS fell by 86% and over the past three years, the total loss to shareholders 6.8%

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In the past three years, the share price of RF Industries, Ltd. (NASDAQ:RFIL) has struggled to generate growth for its shareholders. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 10th of September and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

See our latest analysis for RF Industries

Comparing RF Industries, Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that RF Industries, Ltd. has a market capitalization of US$75m, and reported total annual CEO compensation of US$910k for the year to October 2024. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$400k.

On comparing similar-sized companies in the American Electronic industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$446k. Accordingly, our analysis reveals that RF Industries, Ltd. pays Rob Dawson north of the industry median. Moreover, Rob Dawson also holds US$1.9m worth of RF Industries 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 23% of total compensation represents salary and 77% is other remuneration. RF Industries pays out 44% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

RF Industries, Ltd.'s Growth

Over the last three years, RF Industries, Ltd. has shrunk its earnings per share by 86% per year. In the last year, its revenue is up 20%.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has RF Industries, Ltd. Been A Good Investment?

Since shareholders would have lost about 6.8% over three years, some RF Industries, Ltd. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for RF Industries that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.