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Shareholders will probably not be too impressed with the underwhelming results at AstroNova, Inc. (NASDAQ:ALOT) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 08 June 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
How Does Total Compensation For Greg Woods Compare With Other Companies In The Industry?
According to our data, AstroNova, Inc. has a market capitalization of US$118m, and paid its CEO total annual compensation worth US$1.2m over the year to January 2021. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$410k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$975k. So it looks like AstroNova compensates Greg Woods in line with the median for the industry. Moreover, Greg Woods also holds US$2.0m worth of AstroNova stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. AstroNova is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at AstroNova, Inc.'s Growth Numbers
Over the last three years, AstroNova, Inc. has shrunk its earnings per share by 28% per year. Its revenue is down 13% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has AstroNova, Inc. Been A Good Investment?
Given the total shareholder loss of 3.6% over three years, many shareholders in AstroNova, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for AstroNova (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
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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