Steven Miller has been the CEO of Big 5 Sporting Goods Corporation (NASDAQ:BGFV) since 2000. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Steven Miller's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Big 5 Sporting Goods Corporation has a market cap of US$60m, and reported total annual CEO compensation of US$793k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$567k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$511k.
Thus we can conclude that Steven Miller receives more in total compensation than the median of a group of companies in the same market, and of similar size to Big 5 Sporting Goods Corporation. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Big 5 Sporting Goods has changed from year to year.
Is Big 5 Sporting Goods Corporation Growing?
Big 5 Sporting Goods Corporation has reduced its earnings per share by an average of 86% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1.6% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. 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. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Big 5 Sporting Goods Corporation Been A Good Investment?
Since shareholders would have lost about 82% over three years, some Big 5 Sporting Goods Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Big 5 Sporting Goods Corporation pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Big 5 Sporting Goods.
Important note: Big 5 Sporting Goods may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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