Yahoo Finance What Does Electro-Sensors' (NASDAQ:ELSE) CEO Pay Reveal?
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David Klenk has been the CEO of Electro-Sensors, Inc. (NASDAQ:ELSE) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Electro-Sensors
Comparing Electro-Sensors, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Electro-Sensors, Inc. has a market capitalization of US$12m, and reported total annual CEO compensation of US$272k for the year to December 2019. That's just a smallish increase of 7.0% on last year. Notably, the salary which is US$225.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$362k. From this we gather that David Klenk is paid around the median for CEOs in the industry.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$225k | US$220k | 83% |
Other | US$47k | US$34k | 17% |
Total Compensation | US$272k | US$254k | 100% |
Speaking on an industry level, nearly 35% of total compensation represents salary, while the remainder of 65% is other remuneration. It's interesting to note that Electro-Sensors pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Electro-Sensors, Inc.'s Growth
Over the last three years, Electro-Sensors, Inc. has shrunk its earnings per share by 15% per year. Its revenue is up 4.9% over the last year.
Few shareholders would be pleased to read that earnings have declined. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Electro-Sensors, Inc. Been A Good Investment?
With a three year total loss of 2.3% for the shareholders, Electro-Sensors, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, David is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining earnings growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Electro-Sensors we think you should know about.
Switching gears from Electro-Sensors, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. 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.
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