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A Quick Analysis On Value Line's (NASDAQ:VALU) CEO Compensation

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·3 min read
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This article will reflect on the compensation paid to Howard Brecher who has served as CEO of Value Line, Inc. (NASDAQ:VALU) since 2009. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Value Line

How Does Total Compensation For Howard Brecher Compare With Other Companies In The Industry?

At the time of writing, our data shows that Value Line, Inc. has a market capitalization of US$287m, and reported total annual CEO compensation of US$870k for the year to April 2020. That's just a smallish increase of 5.7% on last year. Notably, the salary which is US$650.0k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$677k. This suggests that Value Line remunerates its CEO largely in line with the industry average.

Component

2020

2019

Proportion (2020)

Salary

US$650k

US$625k

75%

Other

US$220k

US$198k

25%

Total Compensation

US$870k

US$823k

100%

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. According to our research, Value Line has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Value Line, Inc.'s Growth Numbers

Value Line, Inc. has seen its earnings per share (EPS) increase by 38% a year over the past three years. It achieved revenue growth of 8.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Value Line, Inc. Been A Good Investment?

We think that the total shareholder return of 74%, over three years, would leave most Value Line, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Value Line, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Value Line that investors should look into moving forward.

Important note: Value Line is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.