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Is Digital Ally, Inc.'s (NASDAQ:DGLY) CEO Paid At A Competitive Rate?

Simply Wall St

Stan Ross has been the CEO of Digital Ally, Inc. (NASDAQ:DGLY) since 2005. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.

Check out our latest analysis for Digital Ally

How Does Stan Ross's Compensation Compare With Similar Sized Companies?

According to our data, Digital Ally, Inc. has a market capitalization of US$13m, and paid its CEO total annual compensation worth US$1.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$250k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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$526k.

It would therefore appear that Digital Ally, Inc. pays Stan Ross 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Digital Ally has changed over time.

NasdaqCM:DGLY CEO Compensation, January 4th 2020

Is Digital Ally, Inc. Growing?

Digital Ally, Inc. has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). It saw its revenue drop 12% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Digital Ally, Inc. Been A Good Investment?

Since shareholders would have lost about 74% over three years, some Digital Ally, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Digital Ally, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying Digital Ally shares with their own money (free access).

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.