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Is Avalon Holdings Corporation's (NYSEMKT:AWX) CEO Paid Enough Relative To Peers?

Simply Wall St

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Ron Klingle has been the CEO of Avalon Holdings Corporation (NYSEMKT:AWX) since 2011. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Avalon Holdings

How Does Ron Klingle's Compensation Compare With Similar Sized Companies?

Our data indicates that Avalon Holdings Corporation is worth US$9.8m, and total annual CEO compensation is US$242k. (This number is for the twelve months until December 2018). That's a fairly small increase of 4.2% on year before. We think total compensation is more important but we note that the CEO salary is lower, at US$210k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$437k.

Most shareholders would consider it a positive that Ron Klingle takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Avalon Holdings has changed from year to year.

AMEX:AWX CEO Compensation, May 10th 2019

Is Avalon Holdings Corporation Growing?

Avalon Holdings Corporation has increased its earnings per share (EPS) by an average of 18% a year, over the last three years (using a line of best fit). It achieved revenue growth of 11% over the last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Avalon Holdings Corporation Been A Good Investment?

Avalon Holdings Corporation has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It appears that Avalon Holdings Corporation remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Ron Klingle is overcompensated.

It's great to see a company that pays its CEO reasonably, even while growing. It would be an additional positive if insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Avalon Holdings shares (free trial).

If you want to buy a stock that is better than Avalon Holdings, this free list of high return, low debt companies is a great place to look.

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.