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Is Gencor Industries, Inc.'s (NASDAQ:GENC) CEO Being Overpaid?

Simply Wall St

John Elliott has been the CEO of Gencor Industries, Inc. (NASDAQ:GENC) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Gencor Industries

How Does John Elliott's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Gencor Industries, Inc. has a market cap of US$172m, and reported total annual CEO compensation of US$451k for the year to September 2018. Notably, the salary of US$450k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.

A first glance this seems like a real positive for shareholders, since John Elliott is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Gencor Industries, below.

NasdaqGM:GENC CEO Compensation, December 24th 2019

Is Gencor Industries, Inc. Growing?

Gencor Industries, Inc. has increased its earnings per share (EPS) by an average of 19% a year, over the last three years (using a line of best fit). Its revenue is down 18% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Gencor Industries, Inc. Been A Good Investment?

Since shareholders would have lost about 25% over three years, some Gencor Industries, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Gencor Industries, Inc. is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that John Elliott is generously paid, it would be good to see an improvement in business performance before too an increase in pay. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Whatever your view on compensation, you might want to check if insiders are buying or selling Gencor Industries shares (free trial).

If you want to buy a stock that is better than Gencor Industries, this free list of high return, low debt companies is a great place to look.

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.