Dean Krutty became the CEO of Arotech Corporation (NASDAQ:ARTX) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dean Krutty's Compensation Compare With Similar Sized Companies?
Our data indicates that Arotech Corporation is worth US$57m, and total annual CEO compensation is US$639k. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$272k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$484k.
As you can see, Dean Krutty is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Arotech Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Arotech has changed over time.
Is Arotech Corporation Growing?
Arotech Corporation has increased its earnings per share (EPS) by an average of 43% a year, over the last three years (using a line of best fit). It saw its revenue drop -12% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Arotech Corporation Been A Good Investment?
With a three year total loss of 21%, Arotech Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Arotech Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Arotech shares with their own money (free access).
Important note: Arotech may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.