Is Ultralife Corporation’s (NASDAQ:ULBI) CEO Overpaid Relative To Its Peers?
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In 2010 Mike Popielec was appointed CEO of Ultralife Corporation (NASDAQ:ULBI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Ultralife
How Does Mike Popielec’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ultralife Corporation has a market cap of US$132m, and is paying total annual CEO compensation of US$1.1m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$504k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$300k.
As you can see, Mike Popielec is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ultralife Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Ultralife, below.
Is Ultralife Corporation Growing?
On average over the last three years, Ultralife Corporation has grown earnings per share (EPS) by 48% each year (using a line of best fit). In the last year, its revenue is up 4.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Ultralife Corporation Been A Good Investment?
Most shareholders would probably be pleased with Ultralife Corporation for providing a total return of 60% over three years. 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…
We examined the amount Ultralife Corporation 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, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Ultralife shares (free trial).
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.
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 editorial-team@simplywallst.com.
