In 2013 Lee Rudow was appointed CEO of Transcat, Inc. (NASDAQ:TRNS). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Lee Rudow’s Compensation Compare With Similar Sized Companies?
According to our data, Transcat, Inc. has a market capitalization of US$140m, and pays its CEO total annual compensation worth US$943k. (This is based on the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$230k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$303k.
Thus we can conclude that Lee Rudow receives more in total compensation than the median of a group of companies in the same market, and of similar size to Transcat, Inc.. However, this doesn’t necessarily mean the pay 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 Transcat has changed over time.
Is Transcat, Inc. Growing?
Transcat, Inc. has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). It achieved revenue growth of 6.6% 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 a little revenue growth, as this is consistent with healthy business conditions.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Transcat, Inc. Been A Good Investment?
Boasting a total shareholder return of 111% over three years, Transcat, Inc. 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.
We examined the amount Transcat, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Transcat shares (free trial).
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.