James Reed has been the CEO of USA Truck, Inc. (NASDAQ:USAK) since 2017. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does James Reed's Compensation Compare With Similar Sized Companies?
Our data indicates that USA Truck, Inc. is worth US$46m, and total annual CEO compensation was reported as US$1.6m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$456k. Importantly, there may be performance hurdles relating to the non-salary component 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$521k.
As you can see, James Reed is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean USA Truck, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at USA Truck has changed over time.
Is USA Truck, Inc. Growing?
USA Truck, Inc. has increased its earnings per share (EPS) by an average of 53% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 2.1%.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has USA Truck, Inc. Been A Good Investment?
Given the total loss of 42% over three years, many shareholders in USA Truck, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by USA Truck, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling USA Truck shares (free trial).
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 firstname.lastname@example.org. 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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