Jeff Williams has been the CEO of America's Car-Mart, Inc. (NASDAQ:CRMT) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Jeff Williams Compare With Other Companies In The Industry?
At the time of writing, our data shows that America's Car-Mart, Inc. has a market capitalization of US$595m, and reported total annual CEO compensation of US$4.9m for the year to April 2020. That's a notable increase of 59% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$573k.
In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.4m. Accordingly, our analysis reveals that America's Car-Mart, Inc. pays Jeff Williams north of the industry median. Moreover, Jeff Williams also holds US$7.9m worth of America's Car-Mart stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that America's Car-Mart allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
America's Car-Mart, Inc.'s Growth
Over the past three years, America's Car-Mart, Inc. has seen its earnings per share (EPS) grow by 48% per year. Its revenue is up 12% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing 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 America's Car-Mart, Inc. Been A Good Investment?
We think that the total shareholder return of 113%, over three years, would leave most America's Car-Mart, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, America's Car-Mart, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Jeff deserves a raise!
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is concerning) in America's Car-Mart we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
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