In 2016 Pete Knapper was appointed CEO of SIFCO Industries, Inc. (NYSEMKT:SIF). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Pete Knapper's Compensation Compare With Similar Sized Companies?
Our data indicates that SIFCO Industries, Inc. is worth US$17m, and total annual CEO compensation is US$932k. (This is based on the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$359k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$446k.
As you can see, Pete Knapper is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean SIFCO Industries, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at SIFCO Industries has changed over time.
Is SIFCO Industries, Inc. Growing?
SIFCO Industries, Inc. saw earnings per share stay pretty flat over the last three years, albeit with a slight positive trend. In the last year, its revenue is up 4.4%.
I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has SIFCO Industries, Inc. Been A Good Investment?
Given the total loss of 70% over three years, many shareholders in SIFCO Industries, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by SIFCO Industries, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at SIFCO Industries.
Important note: SIFCO Industries 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.
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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. Thank you for reading.