In 2000 Bill Ulland was appointed CEO of IKONICS Corporation (NASDAQ:IKNX). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Bill Ulland's Compensation Compare With Similar Sized Companies?
According to our data, IKONICS Corporation has a market capitalization of US$12m, and pays its CEO total annual compensation worth US$302k. (This figure is for the year to December 2018). Notably, the salary of US$288k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$492k.
Most shareholders would consider it a positive that Bill Ulland takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at IKONICS has changed from year to year.
Is IKONICS Corporation Growing?
Over the last three years IKONICS Corporation has shrunk its earnings per share by an average of 7.5% per year (measured with a line of best fit). Revenue was pretty flat on last year.
Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has IKONICS Corporation Been A Good Investment?
Given the total loss of 46% over three years, many shareholders in IKONICS Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
IKONICS Corporation is currently paying its CEO below what is normal for companies of its size.
Bill Ulland 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. Whatever your view on compensation, you might want to check if insiders are buying or selling IKONICS shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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