How Is Digital Ally's (NASDAQ:DGLY) CEO Compensated?
Stan Ross has been the CEO of Digital Ally, Inc. (NASDAQ:DGLY) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Digital Ally.
View our latest analysis for Digital Ally
Comparing Digital Ally, Inc.'s CEO Compensation With the industry
According to our data, Digital Ally, Inc. has a market capitalization of US$59m, and paid its CEO total annual compensation worth US$1.2m over the year to December 2019. Notably, that's an increase of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$250k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$422k. Hence, we can conclude that Stan Ross is remunerated higher than the industry median. What's more, Stan Ross holds US$2.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$250k | US$250k | 20% |
Other | US$996k | US$836k | 80% |
Total Compensation | US$1.2m | US$1.1m | 100% |
On an industry level, roughly 33% of total compensation represents salary and 67% is other remuneration. Digital Ally sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Digital Ally, Inc.'s Growth Numbers
Digital Ally, Inc.'s earnings per share (EPS) grew 32% per year over the last three years. Its revenue is down 8.2% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Digital Ally, Inc. Been A Good Investment?
Since shareholders would have lost about 16% over three years, some Digital Ally, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we noted earlier, Digital Ally pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Stan is earning a very handsome sum.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Digital Ally you should be aware of, and 1 of them makes us a bit uncomfortable.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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