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Does ARC Document Solutions Inc’s (NYSE:ARC) CEO Pay Reflect Performance?

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In 2007 Suri Kumarakulasingam was appointed CEO of ARC Document Solutions Inc (NYSE:ARC). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for ARC Document Solutions

How Does Suri Kumarakulasingam’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that ARC Document Solutions Inc has a market cap of US$113m, and is paying total annual CEO compensation of US$1.4m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$950k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$296k.

As you can see, Suri Kumarakulasingam is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ARC Document Solutions Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at ARC Document Solutions, below.

NYSE:ARC CEO Compensation November 27th 18
NYSE:ARC CEO Compensation November 27th 18

Is ARC Document Solutions Inc Growing?

ARC Document Solutions Inc has reduced its earnings per share by an average of 87% a year, over the last three years. Revenue was pretty flat on last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has ARC Document Solutions Inc Been A Good Investment?

Since shareholders would have lost about 51% over three years, some ARC Document Solutions Inc shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount ARC Document Solutions Inc pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ARC Document Solutions (free visualization of insider trades).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.