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Should You Worry About ARC Document Solutions, Inc.'s (NYSE:ARC) CEO Pay Cheque?

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Simply Wall St
·3 min read
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In 2007 Suri Kumarakulasingam was appointed CEO of ARC Document Solutions, Inc. (NYSE:ARC). 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.

Check out our latest analysis for ARC Document Solutions

How Does Suri Kumarakulasingam's Compensation Compare With Similar Sized Companies?

According to our data, ARC Document Solutions, Inc. has a market capitalization of US$59m, and paid its CEO total annual compensation worth US$2.4m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$823k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$523k.

It would therefore appear that ARC Document Solutions, Inc. pays Suri Kumarakulasingam 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 ARC Document Solutions has changed from year to year.

NYSE:ARC CEO Compensation, February 4th 2020
NYSE:ARC CEO Compensation, February 4th 2020

Is ARC Document Solutions, Inc. Growing?

Over the last three years ARC Document Solutions, Inc. has grown its earnings per share (EPS) by an average of 88% per year (using a line of best fit). It saw its revenue drop 2.7% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 ARC Document Solutions, Inc. Been A Good Investment?

Given the total loss of 72% over three years, many shareholders in ARC Document Solutions, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by ARC Document Solutions, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ARC Document Solutions.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.