In 2012 Bob Bauer was appointed CEO of L.B. Foster Company (NASDAQ:FSTR). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bob Bauer's Compensation Compare With Similar Sized Companies?
According to our data, L.B. Foster Company has a market capitalization of US$206m, and paid its CEO total annual compensation worth US$2.3m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$631k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.2m.
As you can see, Bob Bauer is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean L.B. Foster Company is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at L.B. Foster has changed over time.
Is L.B. Foster Company Growing?
Over the last three years L.B. Foster Company has grown its earnings per share (EPS) by an average of 87% per year (using a line of best fit). It achieved revenue growth of 20% over the last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has L.B. Foster Company Been A Good Investment?
Most shareholders would probably be pleased with L.B. Foster Company for providing a total return of 57% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at L.B. Foster Company with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying L.B. Foster shares with their own money (free access).
If you want to buy a stock that is better than L.B. Foster, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.