In 2009 Daniel Cushman was appointed CEO of P.A.M. Transportation Services, Inc. (NASDAQ:PTSI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Daniel Cushman’s Compensation Compare With Similar Sized Companies?
According to our data, P.A.M. Transportation Services, Inc. has a market capitalization of US$226m, and pays its CEO total annual compensation worth US$2.5m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$565k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO compensation of that group was US$967k.
It would therefore appear that P.A.M. Transportation Services, Inc. pays Daniel Cushman 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at P.A.M. Transportation Services has changed from year to year.
Is P.A.M. Transportation Services, Inc. Growing?
On average over the last three years, P.A.M. Transportation Services, Inc. has grown earnings per share (EPS) by 47% each year (using a line of best fit). In the last year, its revenue is up 16%.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has P.A.M. Transportation Services, Inc. Been A Good Investment?
Most shareholders would probably be pleased with P.A.M. Transportation Services, Inc. for providing a total return of 98% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount P.A.M. Transportation Services, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling P.A.M. Transportation Services shares (free trial).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
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 firstname.lastname@example.org.