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Zach Parker has been the CEO of DLH Holdings Corp. (NASDAQ:DLHC) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether DLH Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing DLH Holdings Corp.'s CEO Compensation With the industry
Our data indicates that DLH Holdings Corp. has a market capitalization of US$96m, and total annual CEO compensation was reported as US$992k for the year to September 2019. That's a fairly small increase of 3.5% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$446k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$765k. This suggests that DLH Holdings remunerates its CEO largely in line with the industry average. Furthermore, Zach Parker directly owns US$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. It's interesting to note that DLH Holdings pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at DLH Holdings Corp.'s Growth Numbers
Over the past three years, DLH Holdings Corp. has seen its earnings per share (EPS) grow by 6.0% per year. Its revenue is up 47% over the last year.
It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has DLH Holdings Corp. Been A Good Investment?
Boasting a total shareholder return of 37% over three years, DLH Holdings Corp. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Zach is compensated close to the median for companies of its size, and which belong to the same industry. But the company has been found wanting in terms of earnings growth over the past three years. Meanwhile, shareholder returns have remained positive over the same time frame. We would like to see EPS growth from the business, although we wouldn't say the CEO compensation is high.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 6 warning signs for DLH Holdings that investors should think about before committing capital to this stock.
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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