Key Things To Understand About SIFCO Industries' (NYSEMKT:SIF) CEO Pay Cheque
Pete Knapper became the CEO of SIFCO Industries, Inc. (NYSEMKT:SIF) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for SIFCO Industries
How Does Total Compensation For Pete Knapper Compare With Other Companies In The Industry?
At the time of writing, our data shows that SIFCO Industries, Inc. has a market capitalization of US$24m, and reported total annual CEO compensation of US$787k for the year to September 2019. We note that's a decrease of 16% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$390k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$429k. Hence, we can conclude that Pete Knapper is remunerated higher than the industry median. Furthermore, Pete Knapper directly owns US$560k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$390k | US$359k | 50% |
Other | US$397k | US$574k | 50% |
Total Compensation | US$787k | US$932k | 100% |
On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that SIFCO Industries pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at SIFCO Industries, Inc.'s Growth Numbers
SIFCO Industries, Inc.'s earnings per share (EPS) grew 53% per year over the last three years. In the last year, its revenue is up 3.4%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has SIFCO Industries, Inc. Been A Good Investment?
Given the total shareholder loss of 29% over three years, many shareholders in SIFCO Industries, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, SIFCO Industries pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which make us uncomfortable) in SIFCO Industries we think you should know about.
Switching gears from SIFCO Industries, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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