Yahoo Finance Why Servotronics' (NYSEMKT:SVT) CEO Pay Matters
Ken Trbovich has been the CEO of Servotronics, Inc. (NYSEMKT:SVT) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Servotronics.
Check out our latest analysis for Servotronics
How Does Total Compensation For Ken Trbovich Compare With Other Companies In The Industry?
Our data indicates that Servotronics, Inc. has a market capitalization of US$21m, and total annual CEO compensation was reported as US$654k for the year to December 2019. That's a notable decrease of 19% on last year. In particular, the salary of US$606.5k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$486k. This suggests that Ken Trbovich is paid more than the median for the industry. Moreover, Ken Trbovich also holds US$993k worth of Servotronics stock directly under their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$606k | US$556k | 93% |
Other | US$48k | US$247k | 7% |
Total Compensation | US$654k | US$803k | 100% |
Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Servotronics is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Servotronics, Inc.'s Growth Numbers
Servotronics, Inc. has seen its earnings per share (EPS) increase by 85% a year over the past three years. It achieved revenue growth of 13% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Servotronics, Inc. Been A Good Investment?
Servotronics, Inc. has not done too badly by shareholders, with a total return of 3.2%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As we touched on above, Servotronics, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed us with its EPS growth, over three years. We also think investor returns are steady over the same time period. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Servotronics that investors should look into moving forward.
Important note: Servotronics is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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