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Is Research Frontiers Incorporated's (NASDAQ:REFR) CEO Overpaid Relative To Its Peers?

Simply Wall St

Joe Harary became the CEO of Research Frontiers Incorporated (NASDAQ:REFR) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Research Frontiers

How Does Joe Harary's Compensation Compare With Similar Sized Companies?

According to our data, Research Frontiers Incorporated has a market capitalization of US$104m, and paid its CEO total annual compensation worth US$655k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$450k. 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$510k.

So Joe Harary receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Research Frontiers has changed from year to year.

NasdaqCM:REFR CEO Compensation, November 14th 2019

Is Research Frontiers Incorporated Growing?

On average over the last three years, Research Frontiers Incorporated has grown earnings per share (EPS) by 21% each year (using a line of best fit). It achieved revenue growth of 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Research Frontiers Incorporated Been A Good Investment?

Boasting a total shareholder return of 52% over three years, Research Frontiers Incorporated has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Joe Harary is paid around what is normal the leaders of comparable size companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Research Frontiers insiders are buying or selling shares.

Important note: Research Frontiers may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.