Gerald Salzman is the CEO of Daily Journal Corporation (NASDAQ:DJCO). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Gerald Salzman's Compensation Compare With Similar Sized Companies?
According to our data, Daily Journal Corporation has a market capitalization of US$395m, and paid its CEO total annual compensation worth US$650k over the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$250k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Daily Journal has changed over time.
Is Daily Journal Corporation Growing?
On average over the last three years, Daily Journal Corporation has shrunk earnings per share by 74% each year (measured with a line of best fit). Its revenue is up 20% over last year.
Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Daily Journal Corporation Been A Good Investment?
Daily Journal Corporation has served shareholders reasonably well, with a total return of 25% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Daily Journal Corporation pays its CEO less than similar sized companies.
Gerald Salzman is remunerated more modestly than is a normal at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Daily Journal.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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