John Hardy has been the CEO of Equus Total Return, Inc. (NYSE:EQS) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Equus Total Return, Inc.'s CEO Compensation With the industry
Our data indicates that Equus Total Return, Inc. has a market capitalization of US$19m, and total annual CEO compensation was reported as US$842k for the year to December 2019. That's a notable increase of 30% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$350k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$362k. Accordingly, our analysis reveals that Equus Total Return, Inc. pays John Hardy north of the industry median. Moreover, John Hardy also holds US$5.3m worth of Equus Total Return stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. According to our research, Equus Total Return has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Equus Total Return, Inc.'s Growth
Equus Total Return, Inc. has reduced its earnings per share by 55% a year over the last three years. Its revenue is up 27% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Equus Total Return, Inc. Been A Good Investment?
With a three year total loss of 40% for the shareholders, Equus Total Return, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, Equus Total Return pays its CEO higher than the norm for similar-sized companies belonging to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On the bright side, at lease revenue growth seems to be marching northward. Few would argue that it's wise for the company to pay any more, before returns improve.
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. In our study, we found 4 warning signs for Equus Total Return you should be aware of, and 3 of them are a bit unpleasant.
Switching gears from Equus Total Return, 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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