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What Can We Learn About Avalon Holdings' (NYSEMKT:AWX) CEO Compensation?

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Simply Wall St
·3 min read
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This article will reflect on the compensation paid to Ron Klingle who has served as CEO of Avalon Holdings Corporation (NYSEMKT:AWX) since 2011. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Avalon Holdings.

View our latest analysis for Avalon Holdings

How Does Total Compensation For Ron Klingle Compare With Other Companies In The Industry?

Our data indicates that Avalon Holdings Corporation has a market capitalization of US$7.5m, and total annual CEO compensation was reported as US$243k for the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is US$210.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$837k. That is to say, Ron Klingle is paid under the industry median. Furthermore, Ron Klingle directly owns US$1.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$210k

US$210k

87%

Other

US$33k

US$32k

13%

Total Compensation

US$243k

US$242k

100%

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Avalon Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Avalon Holdings Corporation's Growth Numbers

Over the last three years, Avalon Holdings Corporation has shrunk its earnings per share by 47% per year. Its revenue is down 6.3% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Avalon Holdings Corporation Been A Good Investment?

Given the total shareholder loss of 3.0% over three years, many shareholders in Avalon Holdings Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Avalon Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Avalon Holdings (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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.

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.