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David Klenk became the CEO of Electro-Sensors, Inc. (NASDAQ:ELSE) in 2013. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does David Klenk's Compensation Compare With Similar Sized Companies?
According to our data, Electro-Sensors, Inc. has a market capitalization of US$12m, and pays its CEO total annual compensation worth US$254k. (This number is for the twelve months until December 2018). That's a fairly small increase of 1.4% on year before. We think total compensation is more important but we note that the CEO salary is lower, at US$220k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$440k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Electro-Sensors has changed from year to year.
Is Electro-Sensors, Inc. Growing?
Over the last three years Electro-Sensors, Inc. has shrunk its earnings per share by an average of 82% per year (measured with a line of best fit). Its revenue is down -4.4% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Electro-Sensors, Inc. Been A Good Investment?
Electro-Sensors, Inc. has generated a total shareholder return of 7.8% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It appears that Electro-Sensors, Inc. remunerates its CEO below most similar sized companies.
David Klenk is remunerated more modestly than is a normal at similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. There is room for improved company performance, but we don't see the CEO pay as a big issue here. Shareholders may want to check for free if Electro-Sensors insiders are buying or selling shares.
Important note: Electro-Sensors 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.
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.