In 2016 Gus Vlak was appointed CEO of The Eastern Company (NASDAQ:EML). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. 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 Gus Vlak’s Compensation Compare With Similar Sized Companies?
According to our data, The Eastern Company has a market capitalization of US$179m, and pays its CEO total annual compensation worth US$1m. We note that’s an increase of 15% above last year. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO compensation was US$919k.
That means Gus Vlak receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Eastern has changed over time.
Is The Eastern Company Growing?
Over the last three years The Eastern Company has grown its earnings per share (EPS) by an average of 8.3% per year. Its revenue is up 43% over last year.
I like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn’t shabby. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives!
Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The Eastern Company Been A Good Investment?
I think that the total shareholder return of 76%, over three years, would leave most The Eastern Company shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Gus Vlak is paid around the same as most CEOs of similar size companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. So you may want to check if insiders are buying The Eastern Company shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past 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 email@example.com.