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Does Art’s-Way Manufacturing Co Inc’s (NASDAQ:ARTW) CEO Pay Compare Well With Peers?

Carrie Gunnerson has been the CEO of Art’s-Way Manufacturing Co Inc (NASDAQ:ARTW) since 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Art’s-Way Manufacturing

How Does Carrie Gunnerson’s Compensation Compare With Similar Sized Companies?

According to our data, Art’s-Way Manufacturing Co Inc has a market capitalization of US$9.7m, and pays its CEO total annual compensation worth US$200k. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$166k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$296k.

A first glance this seems like a real positive for shareholders, since Carrie Gunnerson is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Art’s-Way Manufacturing has changed from year to year.

NasdaqCM:ARTW CEO Compensation November 27th 18

Is Art’s-Way Manufacturing Co Inc Growing?

On average over the last three years, Art’s-Way Manufacturing Co Inc has shrunk earnings per share by 78% each year. Its revenue is up 6.2% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Art’s-Way Manufacturing Co Inc Been A Good Investment?

With a three year total loss of 24%, Art’s-Way Manufacturing Co Inc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Art’s-Way Manufacturing Co Inc is currently paying its CEO below what is normal for companies of its size.

Carrie Gunnerson is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Art’s-Way Manufacturing.

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.