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Is CECO Environmental Corp.'s (NASDAQ:CECE) CEO Salary Justified?

Simply Wall St

Dennis Sadlowski became the CEO of CECO Environmental Corp. (NASDAQ:CECE) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for CECO Environmental

How Does Dennis Sadlowski's Compensation Compare With Similar Sized Companies?

Our data indicates that CECO Environmental Corp. is worth US$270m, and total annual CEO compensation was reported as US$2.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$575k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.1m.

As you can see, Dennis Sadlowski is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean CECO Environmental Corp. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at CECO Environmental has changed over time.

NasdaqGS:CECE CEO Compensation, January 1st 2020

Is CECO Environmental Corp. Growing?

Over the last three years CECO Environmental Corp. has grown its earnings per share (EPS) by an average of 54% per year (using a line of best fit). Its revenue is up 9.2% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has CECO Environmental Corp. Been A Good Investment?

Given the total loss of 44% over three years, many shareholders in CECO Environmental Corp. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount CECO Environmental Corp. 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. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling CECO Environmental shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.