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Does Superior Drilling Products, Inc.'s (NYSEMKT:SDPI) CEO Pay Reflect Performance?

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·3 min read
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G. Meier has been the CEO of Superior Drilling Products, Inc. (NYSEMKT:SDPI) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Superior Drilling Products

How Does G. Meier's Compensation Compare With Similar Sized Companies?

According to our data, Superior Drilling Products, Inc. has a market capitalization of US$18m, and paid its CEO total annual compensation worth US$985k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$475k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$515k.

Thus we can conclude that G. Meier receives more in total compensation than the median of a group of companies in the same market, and of similar size to Superior Drilling Products, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Superior Drilling Products has changed over time.

AMEX:SDPI CEO Compensation, February 12th 2020
AMEX:SDPI CEO Compensation, February 12th 2020

Is Superior Drilling Products, Inc. Growing?

Superior Drilling Products, Inc. has increased its earnings per share (EPS) by an average of 76% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 1.9%.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has Superior Drilling Products, Inc. Been A Good Investment?

Since shareholders would have lost about 34% over three years, some Superior Drilling Products, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Superior Drilling Products, Inc., 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.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Superior Drilling Products (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.