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Is Summer Infant, Inc.'s (NASDAQ:SUMR) CEO Being Overpaid?

Simply Wall St

In 2016 Mark Messner was appointed CEO of Summer Infant, Inc. (NASDAQ:SUMR). First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Summer Infant

How Does Mark Messner's Compensation Compare With Similar Sized Companies?

Our data indicates that Summer Infant, Inc. is worth US$8.1m, and total annual CEO compensation is US$551k. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$420k. 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$498k.

So Mark Messner receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Summer Infant has changed from year to year.

NasdaqCM:SUMR CEO Compensation, September 13th 2019

Is Summer Infant, Inc. Growing?

On average over the last three years, Summer Infant, Inc. has grown earnings per share (EPS) by 3.7% each year (using a line of best fit). In the last year, its revenue is down -3.8%.

I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 Summer Infant, Inc. Been A Good Investment?

With a three year total loss of 80%, Summer Infant, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

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

The per share growth could be better, in our view. And it's hard to argue that the returns over the last three years have delighted. So suffice it to say we don't think the compensation is modest. Whatever your view on compensation, you might want to check if insiders are buying or selling Summer Infant shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.