Should You Worry About ArcBest Corporation's (NASDAQ:ARCB) CEO Pay?

In 2010 Judy McReynolds was appointed CEO of ArcBest Corporation (NASDAQ:ARCB). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for ArcBest

How Does Judy McReynolds's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that ArcBest Corporation has a market cap of US$503m, and reported total annual CEO compensation of US$4.1m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$709k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.

As you can see, Judy McReynolds is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ArcBest Corporation is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at ArcBest has changed from year to year.

Is ArcBest Corporation Growing?

On average over the last three years, ArcBest Corporation has grown earnings per share (EPS) by 31% each year (using a line of best fit). In the last year, its revenue is down 3.4%.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.

Has ArcBest Corporation Been A Good Investment?

With a three year total loss of 31%, ArcBest Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount ArcBest Corporation 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.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. So you may want to check if insiders are buying ArcBest shares with their own money (free access).

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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