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How Should Investors Feel About Mesa Laboratories, Inc.'s (NASDAQ:MLAB) CEO Pay?

Simply Wall St

Gary Owens became the CEO of Mesa Laboratories, Inc. (NASDAQ:MLAB) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Mesa Laboratories

How Does Gary Owens's Compensation Compare With Similar Sized Companies?

Our data indicates that Mesa Laboratories, Inc. is worth US$1.0b, and total annual CEO compensation was reported as US$3.3m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at US$520k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.8m.

So Gary Owens receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Mesa Laboratories, below.

NasdaqGS:MLAB CEO Compensation, March 10th 2020

Is Mesa Laboratories, Inc. Growing?

Mesa Laboratories, Inc. has reduced its earnings per share by an average of 16% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 6.1% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Mesa Laboratories, Inc. Been A Good Investment?

I think that the total shareholder return of 97%, over three years, would leave most Mesa Laboratories, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Gary Owens is paid around what is normal for the leaders of comparable size companies.

The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we can't see a reason to suggest the pay is inappropriate. On another note, we've spotted 4 warning signs for Mesa Laboratories that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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