Vic Dellovo has been the CEO of CSP Inc. (NASDAQ:CSPI) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
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How Does Vic Dellovo's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that CSP Inc. has a market cap of US$58m, and is paying total annual CEO compensation of US$1.5m. (This is based on the year to September 2018). While we always look at total compensation first, we note that the salary component is less, at US$440k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$446k.
It would therefore appear that CSP Inc. pays Vic Dellovo 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. 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 CSP has changed from year to year.
Is CSP Inc. Growing?
CSP Inc. has reduced its earnings per share by an average of 91% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -32% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has CSP Inc. Been A Good Investment?
Boasting a total shareholder return of 117% over three years, CSP Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We examined the amount CSP Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CSP (free visualization of insider trades).
If you want to buy a stock that is better than CSP, 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 firstname.lastname@example.org. 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.