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Is Allied Healthcare Products, Inc.’s (NASDAQ:AHPI) CEO Being Overpaid?

Isabel Galloway

In 1999 Earl Refsland was appointed CEO of Allied Healthcare Products, Inc. (NASDAQ:AHPI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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.

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How Does Earl Refsland’s Compensation Compare With Similar Sized Companies?

Our data indicates that Allied Healthcare Products, Inc. is worth US$7.8m, and total annual CEO compensation is US$503k. (This is based on the year to 2018). While we always look at total compensation first, we note that the salary component is less, at US$429k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$300k.

It would therefore appear that Allied Healthcare Products, Inc. pays Earl Refsland more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Allied Healthcare Products has changed from year to year.

NasdaqCM:AHPI CEO Compensation January 23rd 19

Is Allied Healthcare Products, Inc. Growing?

Allied Healthcare Products, Inc. has reduced its earnings per share by an average of 3.9% a year, over the last three years. In the last year, its revenue changed by just 0.5%.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Allied Healthcare Products, Inc. Been A Good Investment?

With a total shareholder return of 1.6% over three years, Allied Healthcare Products, Inc. has done okay by shareholders. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We compared total CEO remuneration at Allied Healthcare Products, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And while shareholder returns have been respectable, they have hardly been superb. So we think more research is needed, but we don’t think the CEO underpaid. Shareholders may want to check for free if Allied Healthcare Products insiders are buying or selling shares.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.