Jim Lines has been the CEO of Graham Corporation (NYSE:GHM) since 2008. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
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How Does Jim Lines’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Graham Corporation has a market cap of US$230m, and is paying total annual CEO compensation of US$1.1m. (This number is for the twelve months until 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$435k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$947k.
So Jim Lines is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Graham has changed from year to year.
Is Graham Corporation Growing?
Graham Corporation has reduced its earnings per share by an average of 97% a year, over the last three years. It achieved revenue growth of 4.7% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Graham Corporation Been A Good Investment?
Boasting a total shareholder return of 54% over three years, Graham Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Jim Lines is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. Shareholders may want to check for free if Graham insiders are buying or selling shares.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
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.