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This article will reflect on the compensation paid to Menderes Akdag who has served as CEO of PetMed Express, Inc. (NASDAQ:PETS) since 2001. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Menderes Akdag Compare With Other Companies In The Industry?
At the time of writing, our data shows that PetMed Express, Inc. has a market capitalization of US$585m, and reported total annual CEO compensation of US$1.3m for the year to March 2020. We note that's an increase of 52% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$618k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.9m. Accordingly, PetMed Express pays its CEO under the industry median. What's more, Menderes Akdag holds US$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. According to our research, PetMed Express has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
PetMed Express, Inc.'s Growth
Over the last three years, PetMed Express, Inc. has not seen its earnings per share change much, though there is a slight positive movement. In the last year, its revenue is up 11%.
We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. 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 PetMed Express, Inc. Been A Good Investment?
Since shareholders would have lost about 22% over three years, some PetMed Express, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, PetMed Express, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company isn't growing and total shareholder returns have been disappointing. So while we would not say that Menderes is generously paid, it would be good to see an improvement in business performance before there is talk about a raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for PetMed Express that you should be aware of before investing.
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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