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How Does RF Industries' (NASDAQ:RFIL) CEO Pay Compare With Company Performance?

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Simply Wall St
·4 min read
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This article will reflect on the compensation paid to Rob Dawson who has served as CEO of RF Industries, Ltd. (NASDAQ:RFIL) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for RF Industries.

Check out our latest analysis for RF Industries

How Does Total Compensation For Rob Dawson Compare With Other Companies In The Industry?

At the time of writing, our data shows that RF Industries, Ltd. has a market capitalization of US$44m, and reported total annual CEO compensation of US$493k for the year to October 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$327.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$422k. This suggests that RF Industries remunerates its CEO largely in line with the industry average. What's more, Rob Dawson holds US$320k worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

US$327k

US$259k

66%

Other

US$166k

US$236k

34%

Total Compensation

US$493k

US$496k

100%

Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. According to our research, RF Industries has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

RF Industries, Ltd.'s Growth

Over the past three years, RF Industries, Ltd. has seen its earnings per share (EPS) grow by 21% per year. It saw its revenue drop 3.7% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has RF Industries, Ltd. Been A Good Investment?

We think that the total shareholder return of 73%, over three years, would leave most RF Industries, Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, RF Industries, Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that Rob is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 4 warning signs for RF Industries that you should be aware of before investing.

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.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.