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What Can We Make Of IEC Electronics' (NASDAQ:IEC) CEO Compensation?

Simply Wall St
·3 min read

Jeff Schlarbaum became the CEO of IEC Electronics Corp. (NASDAQ:IEC) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether IEC Electronics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for IEC Electronics

Comparing IEC Electronics Corp.'s CEO Compensation With the industry

Our data indicates that IEC Electronics Corp. has a market capitalization of US$88m, and total annual CEO compensation was reported as US$1.2m for the year to September 2019. We note that's an increase of 52% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$395k.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$362k. This suggests that Jeff Schlarbaum is paid more than the median for the industry. Furthermore, Jeff Schlarbaum directly owns US$224k worth of shares in the company.

Component

2019

2018

Proportion (2019)

Salary

US$395k

US$376k

33%

Other

US$806k

US$416k

67%

Total Compensation

US$1.2m

US$792k

100%

On an industry level, roughly 36% of total compensation represents salary and 64% is other remuneration. Our data reveals that IEC Electronics allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

IEC Electronics Corp.'s Growth

IEC Electronics Corp. has seen its earnings per share (EPS) increase by 45% a year over the past three years. Its revenue is up 22% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has IEC Electronics Corp. Been A Good Investment?

Boasting a total shareholder return of 98% over three years, IEC Electronics Corp. has done well by shareholders. 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.

In Summary...

As previously discussed, Jeff is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, IEC Electronics has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Jeff deserves a raise!

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 4 warning signs for IEC Electronics that investors should look into moving forward.

Switching gears from IEC Electronics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.