How Should Investors React To Sigma Labs, Inc.'s (NASDAQ:SGLB) CEO Pay?
John Rice became the CEO of Sigma Labs, Inc. (NASDAQ:SGLB) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
View our latest analysis for Sigma Labs
How Does John Rice's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Sigma Labs, Inc. has a market cap of US$13m, and reported total annual CEO compensation of US$406k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$126k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$524k.
So John Rice is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Sigma Labs, below.
Is Sigma Labs, Inc. Growing?
Over the last three years Sigma Labs, Inc. has grown its earnings per share (EPS) by an average of 2.0% per year (using a line of best fit). It saw its revenue drop 33% over the last year.
I generally like to see a little revenue growth, but the improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Sigma Labs, Inc. Been A Good Investment?
Given the total loss of 83% over three years, many shareholders in Sigma Labs, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Remuneration for John Rice is close enough to the median pay for a CEO of a similar sized company .
We would like to see somewhat stronger per share growth. And we think the shareholder returns - over three years - have been underwhelming. So many would argue that the CEO is certainly not underpaid. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sigma Labs (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
