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Is VSE Corporation (NASDAQ:VSEC) Excessively Paying Its CEO?

Neil Montgomery

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Mo Gauthier has been the CEO of VSE Corporation (NASDAQ:VSEC) 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for VSE

How Does Mo Gauthier’s Compensation Compare With Similar Sized Companies?

According to our data, VSE Corporation has a market capitalization of US$357m, and pays its CEO total annual compensation worth US$2.4m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$780k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO compensation was US$1.5m.

It would therefore appear that VSE Corporation pays Mo Gauthier more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at VSE, below.

NASDAQGS:VSEC CEO Compensation February 8th 19

Is VSE Corporation Growing?

Over the last three years VSE Corporation has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). In the last year, its revenue is down -8.9%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has VSE Corporation Been A Good Investment?

With a total shareholder return of 19% over three years, VSE Corporation shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at VSE Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven’t been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling VSE 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.

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.