This article will reflect on the compensation paid to Richard Soloway who has served as CEO of Napco Security Technologies, Inc. (NASDAQ:NSSC) since 1998. This analysis will also assess whether Napco Security Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Napco Security Technologies, Inc.'s CEO Compensation With the industry
Our data indicates that Napco Security Technologies, Inc. has a market capitalization of US$459m, and total annual CEO compensation was reported as US$1.1m for the year to June 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of US$790.0k, 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 ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.7m. That is to say, Richard Soloway is paid under the industry median. Furthermore, Richard Soloway directly owns US$156m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 33% of total compensation represents salary, while the remainder of 67% is other remuneration. Napco Security Technologies pays out 70% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Napco Security Technologies, Inc.'s Growth
Napco Security Technologies, Inc. has seen its earnings per share (EPS) increase by 16% a year over the past three years. Its revenue is down 1.6% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Napco Security Technologies, Inc. Been A Good Investment?
We think that the total shareholder return of 145%, over three years, would leave most Napco Security Technologies, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we noted earlier, Napco Security Technologies pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Considering robust EPS growth, we believe Richard to be modestly paid. And given most shareholders are probably very happy with recent shareholder returns, they might even think Richard deserves a raise!
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Napco Security Technologies.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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