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Does Daily Journal Corporation's (NASDAQ:DJCO) CEO Pay Compare Well With Peers?

Simply Wall St

Gerald Salzman is the CEO of Daily Journal Corporation (NASDAQ:DJCO). 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 process should give us an idea about how appropriately the CEO is paid.

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View our latest analysis for Daily Journal

How Does Gerald Salzman's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Daily Journal Corporation has a market cap of US$303m, and is paying total annual CEO compensation of US$650k. (This number is for the twelve months until September 2018). While we always look at total compensation first, we note that the salary component is less, at US$250k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.

A first glance this seems like a real positive for shareholders, since Gerald Salzman is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

You can see, below, how CEO compensation at Daily Journal has changed over time.

NasdaqCM:DJCO CEO Compensation, May 24th 2019

Is Daily Journal Corporation Growing?

On average over the last three years, Daily Journal Corporation has shrunk earnings per share by 42% each year (measured with a line of best fit). In the last year, its revenue is up 3.8%.

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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Daily Journal Corporation Been A Good Investment?

Daily Journal Corporation has served shareholders reasonably well, with a total return of 10% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Daily Journal Corporation is currently paying its CEO below what is normal for companies of its size.

Gerald Salzman is remunerated more modestly than is a normal at similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. There is room for improved company performance, but we don't see the CEO pay as a big issue here. Shareholders may want to check for free if Daily Journal insiders are buying or selling shares.

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.