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Is Universal Stainless & Alloy Products, Inc.'s (NASDAQ:USAP) CEO Salary Justified?

·3 min read

Denny Oates has been the CEO of Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Universal Stainless & Alloy Products

How Does Denny Oates's Compensation Compare With Similar Sized Companies?

Our data indicates that Universal Stainless & Alloy Products, Inc. is worth US$72m, and total annual CEO compensation was reported as US$634k for the year to December 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$450k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$614k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Universal Stainless & Alloy Products stands. On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. Universal Stainless & Alloy Products is paying a higher share of its remuneration through a salary in comparison to the overall industry.

So Denny Oates is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at Universal Stainless & Alloy Products has changed over time.

NasdaqGS:USAP CEO Compensation April 9th 2020
NasdaqGS:USAP CEO Compensation April 9th 2020

Is Universal Stainless & Alloy Products, Inc. Growing?

Universal Stainless & Alloy Products, Inc. has seen earnings per share (EPS) move positively by an average of 51% a year, over the last three years (using a line of best fit). Its revenue is down 5.0% over last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Universal Stainless & Alloy Products, Inc. Been A Good Investment?

Since shareholders would have lost about 52% over three years, some Universal Stainless & Alloy Products, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Denny Oates is paid around the same as most CEOs of similar size companies.

We'd say the company can boast of its EPS growth, but it's disappointing to see negative shareholder returns over three years. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Shifting gears from CEO pay for a second, we've picked out 4 warning signs for Universal Stainless & Alloy Products that investors should be aware of in a dynamic business environment.

If you want to buy a stock that is better than Universal Stainless & Alloy Products, 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.