How Is Transcat's (NASDAQ:TRNS) CEO Paid Relative To Peers?
Lee Rudow has been the CEO of Transcat, Inc. (NASDAQ:TRNS) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Transcat pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Transcat
Comparing Transcat, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Transcat, Inc. has a market capitalization of US$213m, and reported total annual CEO compensation of US$1.0m for the year to March 2020. That's a fairly small increase of 7.0% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$400k.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.2m. So it looks like Transcat compensates Lee Rudow in line with the median for the industry. Furthermore, Lee Rudow directly owns US$5.0m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$400k | US$380k | 39% |
Other | US$627k | US$579k | 61% |
Total Compensation | US$1.0m | US$959k | 100% |
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Transcat pays out 39% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Transcat, Inc.'s Growth
Transcat, Inc.'s earnings per share (EPS) grew 15% per year over the last three years. Its revenue is up 1.8% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Transcat, Inc. Been A Good Investment?
Boasting a total shareholder return of 114% over three years, Transcat, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we touched on above, Transcat, 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. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that Lee is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Transcat that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
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