Is Ark Restaurants Corp.'s (NASDAQ:ARKR) CEO Paid Enough Relative To Peers?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Michael Weinstein has been the CEO of Ark Restaurants Corp. (NASDAQ:ARKR) since 1983. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Ark Restaurants
How Does Michael Weinstein's Compensation Compare With Similar Sized Companies?
According to our data, Ark Restaurants Corp. has a market capitalization of US$71m, and pays its CEO total annual compensation worth US$1.1m. (This figure is for the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$452k.
As you can see, Michael Weinstein is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ark Restaurants Corp. 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 Ark Restaurants has changed over time.
Is Ark Restaurants Corp. Growing?
Over the last three years Ark Restaurants Corp. has shrunk its earnings per share by an average of 13% per year (measured with a line of best fit). It achieved revenue growth of 3.7% over the last year.
Unfortunately, earnings per share have trended lower over the last 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. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Ark Restaurants Corp. Been A Good Investment?
Ark Restaurants Corp. has served shareholders reasonably well, with a total return of 11% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount Ark Restaurants Corp. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! Whatever your view on compensation, you might want to check if insiders are buying or selling Ark Restaurants shares (free trial).
Important note: Ark Restaurants may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.
