Gus Vlak has been the CEO of The Eastern Company (NASDAQ:EML) 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Gus Vlak's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that The Eastern Company has a market cap of US$183m, and reported total annual CEO compensation of US$1.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$450k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.
So Gus Vlak receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Eastern, below.
Is The Eastern Company Growing?
Over the last three years The Eastern Company has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). It achieved revenue growth of 3.4% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The Eastern Company Been A Good Investment?
Most shareholders would probably be pleased with The Eastern Company for providing a total return of 52% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Gus Vlak is paid around what is normal the leaders of comparable size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Eastern (free visualization of insider trades).
Important note: Eastern may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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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