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Is Alpha Pro Tech, Ltd. (NYSEMKT:APT) Excessively Paying Its CEO?

Simply Wall St

Lloyd Hoffman has been the CEO of Alpha Pro Tech, Ltd. (NYSEMKT:APT) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

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View our latest analysis for Alpha Pro Tech

How Does Lloyd Hoffman's Compensation Compare With Similar Sized Companies?

According to our data, Alpha Pro Tech, Ltd. has a market capitalization of US$47m, and pays its CEO total annual compensation worth US$1.0m. (This number is for the twelve months until December 2018). That's a notable increase of 59% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$632k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$450k.

As you can see, Lloyd Hoffman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Alpha Pro Tech, Ltd. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Alpha Pro Tech, below.

AMEX:APT CEO Compensation, May 22nd 2019

Is Alpha Pro Tech, Ltd. Growing?

On average over the last three years, Alpha Pro Tech, Ltd. has grown earnings per share (EPS) by 28% each year (using a line of best fit). In the last year, its revenue is up 6.2%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Alpha Pro Tech, Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Alpha Pro Tech, Ltd. for providing a total return of 45% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount Alpha Pro Tech, Ltd. pays its CEO, and compared it to the amount paid by 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. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Alpha Pro Tech 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.

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.

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. Thank you for reading.