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Is Espey Mfg & Electronics Corp’s (NYSEMKT:ESP) CEO Overpaid Relative To Its Peers?

Patrick Enright became the CEO of Espey Mfg & Electronics Corp (NYSEMKT:ESP) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. 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.

View our latest analysis for Espey Mfg. & Electronics

How Does Patrick Enright’s Compensation Compare With Similar Sized Companies?

Our data indicates that Espey Mfg & Electronics Corp is worth US$66m, and total annual CEO compensation is US$386k. Notably, that’s an increase of 16% over the year before. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$291k.

As you can see, Patrick Enright is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Espey Mfg & Electronics Corp is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Espey Mfg. & Electronics, below.

AMEX:ESP CEO Compensation November 12th 18

Is Espey Mfg & Electronics Corp Growing?

Over the last three years Espey Mfg & Electronics Corp has shrunk its earnings per share by an average of 14% per year. In the last year, its revenue is up 44%.

As investors, we do are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.

Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Espey Mfg & Electronics Corp Been A Good Investment?

Espey Mfg & Electronics Corp has served shareholders reasonably well, with a total return of 28% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at Espey Mfg & Electronics Corp with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Espey Mfg & Electronics Corp (free visualization of insider trades).

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 editorial-team@simplywallst.com.