U.S. Markets closed

Is VirTra, Inc.'s (NASDAQ:VTSI) CEO Pay Justified?

Simply Wall St

In 2008 Bob Ferris was appointed CEO of VirTra, Inc. (NASDAQ:VTSI). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 VirTra

How Does Bob Ferris's Compensation Compare With Similar Sized Companies?

Our data indicates that VirTra, Inc. is worth US$33m, and total annual CEO compensation was reported as US$371k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$234k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$515k.

That means Bob Ferris receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at VirTra has changed from year to year.

NasdaqCM:VTSI CEO Compensation, January 21st 2020

Is VirTra, Inc. Growing?

VirTra, Inc. has reduced its earnings per share by an average of 50% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 14%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has VirTra, Inc. Been A Good Investment?

Since shareholders would have lost about 11% over three years, some VirTra, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Bob Ferris is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling VirTra shares (free trial).

Important note: VirTra may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.