Robert Berman became the CEO of Rekor Systems, Inc. (NASDAQ:REKR) in 2016, 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 Robert Berman Compare With Other Companies In The Industry?
According to our data, Rekor Systems, Inc. has a market capitalization of US$169m, and paid its CEO total annual compensation worth US$518k over the year to December 2019. We note that's an increase of 31% above last year. We note that the salary portion, which stands at US$453.2k constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.9m. In other words, Rekor Systems pays its CEO lower than the industry median. What's more, Robert Berman holds US$31m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. Rekor Systems 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.
Rekor Systems, Inc.'s Growth
Rekor Systems, Inc. has reduced its earnings per share by 28% a year over the last three years. It achieved revenue growth of 62% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Rekor Systems, Inc. Been A Good Investment?
With a total shareholder return of 2.8% over three years, Rekor Systems, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
As we noted earlier, Rekor Systems pays its CEO lower than the norm for similar-sized companies belonging to the same industry. And revenue growth for the company is showing some positive trends.And revenues are growing at a healthy clip.And revenues are increasing at a good pace over the past year. But EPS growth has been negative, and shareholder returns, though growing, have not been very impressive over this time. All things considered, we don't think CEO compensation is too generous, but stockholders might not favor a bump before overall performance improves substantially.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for Rekor Systems (of which 2 can't be ignored!) 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.
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