Yahoo Finance Is Unico American Corporation's (NASDAQ:UNAM) CEO Salary Justified?
Cary Cheldin became the CEO of Unico American Corporation (NASDAQ:UNAM) in 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Unico American
How Does Cary Cheldin's Compensation Compare With Similar Sized Companies?
Our data indicates that Unico American Corporation is worth US$27m, and total annual CEO compensation was reported as US$357k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$331k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$605k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. According to our research, Unico American has allocated a higher percentage of pay to salary in comparison to the broader sector.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at Unico American has changed over time.
Is Unico American Corporation Growing?
Over the last three years Unico American Corporation has seen earnings per share (EPS) move in a positive direction by an average of 18% per year (using a line of best fit). In the last year, its revenue is down 6.7%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 Unico American Corporation Been A Good Investment?
Since shareholders would have lost about 48% over three years, some Unico American Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Unico American Corporation is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Cary Cheldin is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. Taking a breather from CEO compensation, we've spotted 3 warning signs for Unico American (of which 1 is a bit unpleasant!) you should know about in order to have a holistic understanding of the stock.
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.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
