Is Vertex Energy, Inc.’s (NASDAQ:VTNR) CEO Pay Justified?
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Ben Cowart has been the CEO of Vertex Energy, Inc. (NASDAQ:VTNR) since 2009. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Vertex Energy
How Does Ben Cowart’s Compensation Compare With Similar Sized Companies?
According to our data, Vertex Energy, Inc. has a market capitalization of US$50m, and pays its CEO total annual compensation worth US$464k. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$335k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$299k.
As you can see, Ben Cowart is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Vertex Energy, Inc. is paying too much. 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 Vertex Energy has changed over time.
Is Vertex Energy, Inc. Growing?
Over the last three years Vertex Energy, Inc. has grown its earnings per share (EPS) by an average of 40% per year (using a line of best fit). It achieved revenue growth of 33% over the last year.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Vertex Energy, Inc. Been A Good Investment?
Given the total loss of 17% over three years, many shareholders in Vertex Energy, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We compared the total CEO remuneration paid by Vertex Energy, Inc., and compared it to remuneration at a group of 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. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Vertex Energy shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
