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Is Optical Cable Corporation's (NASDAQ:OCC) CEO Pay Fair?

Simply Wall St

Neil Wilkin became the CEO of Optical Cable Corporation (NASDAQ:OCC) in 2003. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Optical Cable

How Does Neil Wilkin's Compensation Compare With Similar Sized Companies?

Our data indicates that Optical Cable Corporation is worth US$26m, and total annual CEO compensation was reported as US$1.1m for the year to October 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$442k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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$523k.

It would therefore appear that Optical Cable Corporation pays Neil Wilkin more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Optical Cable has changed over time.

NasdaqGM:OCC CEO Compensation, January 29th 2020

Is Optical Cable Corporation Growing?

Over the last three years Optical Cable Corporation has shrunk its earnings per share by an average of 62% per year (measured with a line of best fit). It saw its revenue drop 19% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Optical Cable Corporation Been A Good Investment?

With a total shareholder return of 6.6% over three years, Optical Cable Corporation has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared total CEO remuneration at Optical Cable Corporation with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don't think the CEO pay is too low. Shareholders may want to check for free if Optical Cable insiders are buying or selling shares.

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.