In 2016 Tim Damadian was appointed CEO of FONAR Corporation (NASDAQ:FONR). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tim Damadian's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that FONAR Corporation has a market cap of US$139m, and reported total annual CEO compensation of US$156k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$515k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at FONAR, below.
Is FONAR Corporation Growing?
FONAR Corporation has reduced its earnings per share by an average of 2.0% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 9.1% over the last year.
In the last three years the company has failed to grow earnings per share. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has FONAR Corporation Been A Good Investment?
FONAR Corporation has not done too badly by shareholders, with a total return of 4.8%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
FONAR Corporation is currently paying its CEO below what is normal for companies of its size.
Tim Damadian is remunerated more modestly than is a normal at similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. 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 FONAR.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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