Gary Vogel became the CEO of Eagle Bulk Shipping Inc. (NASDAQ:EGLE) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Gary Vogel's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Eagle Bulk Shipping Inc. has a market cap of US$124m, and reported total annual CEO compensation of US$3.5m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$675k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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$606k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 20% of total compensation represents salary and 80% is other remuneration. Our data reveals that Eagle Bulk Shipping allocates salary in line with the wider market.
It would therefore appear that Eagle Bulk Shipping Inc. pays Gary Vogel 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. The graphic below shows how CEO compensation at Eagle Bulk Shipping has changed from year to year.
Is Eagle Bulk Shipping Inc. Growing?
Over the last three years Eagle Bulk Shipping Inc. has seen earnings per share (EPS) move in a positive direction by an average of 132% per year (using a line of best fit). Its revenue is down 5.7% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Eagle Bulk Shipping Inc. Been A Good Investment?
With a three year total loss of 67%, Eagle Bulk Shipping Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Eagle Bulk Shipping 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Looking into other areas, we've picked out 2 warning signs for Eagle Bulk Shipping that investors should think about before committing capital to this stock.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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