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Is DLH Holdings Corp. (NASDAQ:DLHC) Excessively Paying Its CEO?

Simply Wall St

Zach Parker became the CEO of DLH Holdings Corp. (NASDAQ:DLHC) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for DLH Holdings

How Does Zach Parker's Compensation Compare With Similar Sized Companies?

Our data indicates that DLH Holdings Corp. is worth US$50m, and total annual CEO compensation was reported as US$959k for the year to September 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$425k. 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$514k.

As you can see, Zach Parker is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean DLH Holdings Corp. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at DLH Holdings has changed over time.

NasdaqCM:DLHC CEO Compensation, November 1st 2019

Is DLH Holdings Corp. Growing?

Over the last three years DLH Holdings Corp. has shrunk its earnings per share by an average of 19% per year (measured with a line of best fit). It achieved revenue growth of 5.8% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has DLH Holdings Corp. Been A Good Investment?

Since shareholders would have lost about 18% over three years, some DLH Holdings Corp. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at DLH Holdings Corp. 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.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling DLH Holdings (free visualization of insider trades).

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.

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 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. Thank you for reading.