Thomas Shaw has been the CEO of Retractable Technologies, Inc. (NYSEMKT:RVP) since 1994. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Thomas Shaw's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Retractable Technologies, Inc. has a market cap of US$40m, and reported total annual CEO compensation of US$496k for the year to December 2018. Notably, the salary of US$490k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$605k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Retractable Technologies stands. On a sector level, around 24% of total compensation represents salary and 76% is other remuneration. Retractable Technologies is focused on going down a more traditional approach and is paying a higher proportion of compensation through salary, as compared to non-salary benefits.
So Thomas Shaw is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at Retractable Technologies has changed over time.
Is Retractable Technologies, Inc. Growing?
Over the last three years Retractable Technologies, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 41% per year (using a line of best fit). It achieved revenue growth of 8.4% over the last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Retractable Technologies, Inc. Been A Good Investment?
With a total shareholder return of 11% over three years, Retractable Technologies, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Thomas Shaw is close enough to the median pay for a CEO of a similar sized company .
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. Looking into other areas, we've picked out 3 warning signs for Retractable Technologies that investors should think about before committing capital to this stock.
If you want to buy a stock that is better than Retractable Technologies, this free list of high return, low debt companies is a great place to look.
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