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Is Hurco Companies, Inc.'s (NASDAQ:HURC) CEO Pay Fair?

Simply Wall St

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Michael Doar has been the CEO of Hurco Companies, Inc. (NASDAQ:HURC) since 2001. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.

See our latest analysis for Hurco Companies

How Does Michael Doar's Compensation Compare With Similar Sized Companies?

According to our data, Hurco Companies, Inc. has a market capitalization of US$273m, and pays its CEO total annual compensation worth US$2.6m. (This number is for the twelve months until October 2018). That's a notable increase of 27% on last year. While we always look at total compensation first, we note that the salary component is less, at US$477k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.0m.

Thus we can conclude that Michael Doar receives more in total compensation than the median of a group of companies in the same market, and of similar size to Hurco Companies, Inc.. However, this doesn't necessarily mean the pay is too high. 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 Hurco Companies has changed over time.

NasdaqGS:HURC CEO Compensation, April 1st 2019

Is Hurco Companies, Inc. Growing?

Hurco Companies, Inc. has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). It achieved revenue growth of 16% over the last year.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Hurco Companies, Inc. Been A Good Investment?

Hurco Companies, Inc. has served shareholders reasonably well, with a total return of 27% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared total CEO remuneration at Hurco Companies, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. Shareholders may want to check for free if Hurco Companies insiders are buying or selling shares.

Important note: Hurco Companies 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.

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.

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. Thank you for reading.