Barry Sloane became the CEO of Newtek Business Services Corp. (NASDAQ:NEWT) in 1999, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Barry Sloane Compare With Other Companies In The Industry?
According to our data, Newtek Business Services Corp. has a market capitalization of US$401m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2019. We note that's a decrease of 39% compared to last year. In particular, the salary of US$700.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$4.3m. That is to say, Barry Sloane is paid under the industry median. What's more, Barry Sloane holds US$20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. Newtek Business Services pays out 50% of remuneration in the form of a salary, significantly higher than the industry average.
A Look at Newtek Business Services Corp.'s Growth Numbers
Newtek Business Services Corp.'s earnings per share (EPS) grew 3.5% per year over the last three years. It achieved revenue growth of 71% over the last year.
We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Newtek Business Services Corp. Been A Good Investment?
Boasting a total shareholder return of 50% over three years, Newtek Business Services 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.
As we touched on above, Newtek Business Services Corp. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, shareholder returns are rock solid over the past three years, and that’s undoubtedly a good sign. So, considering these tasty returns, CEO compensation seems quite appropriate.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Newtek Business Services (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Newtek Business Services, 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.
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