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Is Transcat, Inc.'s (NASDAQ:TRNS) CEO Being Overpaid?

Simply Wall St

In 2013 Lee Rudow was appointed CEO of Transcat, Inc. (NASDAQ:TRNS). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Transcat

How Does Lee Rudow's Compensation Compare With Similar Sized Companies?

Our data indicates that Transcat, Inc. is worth US$227m, and total annual CEO compensation was reported as US$959k for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$380k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.

So Lee Rudow is paid around the average of 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.

You can see a visual representation of the CEO compensation at Transcat, below.

NasdaqGM:TRNS CEO Compensation, February 27th 2020

Is Transcat, Inc. Growing?

On average over the last three years, Transcat, Inc. has grown earnings per share (EPS) by 22% each year (using a line of best fit). Its revenue is up 8.2% over 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. You might want to check this free visual report on analyst forecasts for future earnings.

Has Transcat, Inc. Been A Good Investment?

I think that the total shareholder return of 158%, over three years, would leave most Transcat, Inc. shareholders smiling. 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...

Lee Rudow 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. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Transcat shares with their own money (free access).

If you want to buy a stock that is better than Transcat, 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.