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Should You Be Pleased About The CEO Pay At Espey Mfg. & Electronics Corp.'s (NYSEMKT:ESP)

Simply Wall St

Pat Enright became the CEO of Espey Mfg. & Electronics Corp. (NYSEMKT:ESP) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Espey Mfg. & Electronics

How Does Pat Enright's Compensation Compare With Similar Sized Companies?

Our data indicates that Espey Mfg. & Electronics Corp. is worth US$43m, and total annual CEO compensation was reported as US$509k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$259k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$614k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 30% of total compensation represents salary and 70% is other remuneration. Espey Mfg. & Electronics pays out 51% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.

So Pat Enright receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see a visual representation of the CEO compensation at Espey Mfg. & Electronics, below.

AMEX:ESP CEO Compensation May 17th 2020

Is Espey Mfg. & Electronics Corp. Growing?

Espey Mfg. & Electronics Corp. has seen earnings per share (EPS) move positively by an average of 4.9% a year, over the last three years (using a line of best fit). Its revenue is down 5.2% over last year.

I generally like to see a little revenue growth, but it is good to see EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Espey Mfg. & Electronics Corp. Been A Good Investment?

Given the total loss of 8.6% over three years, many shareholders in Espey Mfg. & Electronics Corp. 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...

Remuneration for Pat Enright is close enough to the median pay for a CEO of a similar sized company .

We would like to see somewhat stronger per share growth. And we think the shareholder returns - over three years - have been underwhelming. So it would take a bold person to suggest the pay is too modest. CEO compensation is an important area to keep your eyes on, but we've also identified 3 warning signs for Espey Mfg. & Electronics (1 is a bit unpleasant!) that you should be aware of before investing here.

If you want to buy a stock that is better than Espey Mfg. & Electronics, this free list of high return, low debt companies is a great place to look.

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.