James Strange became the CEO of Intelligent Systems Corporation (NYSEMKT:INS) in 1985. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does James Strange's Compensation Compare With Similar Sized Companies?
According to our data, Intelligent Systems Corporation has a market capitalization of US$468m, and pays its CEO total annual compensation worth US$549k. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$300k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.8m.
A first glance this seems like a real positive for shareholders, since James Strange is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Intelligent Systems has changed from year to year.
Is Intelligent Systems Corporation Growing?
Intelligent Systems Corporation has increased its earnings per share (EPS) by an average of 118% a year, over the last three years (using a line of best fit). It achieved revenue growth of 99% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Intelligent Systems Corporation Been A Good Investment?
I think that the total shareholder return of 1337%, over three years, would leave most Intelligent Systems Corporation shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Intelligent Systems Corporation is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that James Strange deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Intelligent Systems shares (free trial).
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.