In 2001 Douglas Starrett was appointed CEO of The LS Starrett Company (NYSE:SCX). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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 Douglas Starrett’s Compensation Compare With Similar Sized Companies?
According to our data, The LS Starrett Company has a market capitalization of US$40m, and pays its CEO total annual compensation worth US$641k. That’s less than last year. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$291k.
It would therefore appear that The LS Starrett Company pays Douglas Starrett more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at L.S. Starrett, below.
Is The LS Starrett Company Growing?
Over the last three years The LS Starrett Company has shrunk its earnings per share by an average of 11% per year. In the last year, its revenue is up 3.1%.
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. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The LS Starrett Company Been A Good Investment?
Given the total loss of 43% over three years, many shareholders in The LS Starrett Company are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by The LS Starrett Company, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
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! Shareholders may want to check for free if The LS Starrett Company insiders are buying or selling shares.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
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 email@example.com.