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This article will reflect on the compensation paid to Zackary Irani who has served as CEO of Biomerica, Inc. (NASDAQ:BMRA) since 1997. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Zackary Irani Compare With Other Companies In The Industry?
Our data indicates that Biomerica, Inc. has a market capitalization of US$86m, and total annual CEO compensation was reported as US$330k for the year to May 2020. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$137k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$581k. That is to say, Zackary Irani is paid under the industry median. Moreover, Zackary Irani also holds US$7.4m worth of Biomerica stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. According to our research, Biomerica has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Biomerica, Inc.'s Growth
Biomerica, Inc. has reduced its earnings per share by 28% a year over the last three years. It achieved revenue growth of 29% over the last year.
Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Biomerica, Inc. Been A Good Investment?
We think that the total shareholder return of 157%, over three years, would leave most Biomerica, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As previously discussed, Zackary is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Meanwhile, shareholder returns and revenues are growing at a good clip. But it's noteworthy that EPS growth is in the red during the same time frame. Negative EPS growth notwithstanding, we can conclude that on this analysis the CEO compensation seems pretty sound.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Biomerica that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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