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Mark LeDoux has been the CEO of Natural Alternatives International, Inc. (NASDAQ:NAII) since 1986. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mark LeDoux’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Natural Alternatives International, Inc. has a market cap of US$94m, and is paying total annual CEO compensation of US$844k. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at US$400k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$452k.
Thus we can conclude that Mark LeDoux receives more in total compensation than the median of a group of companies in the same market, and of similar size to Natural Alternatives International, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Natural Alternatives International has changed over time.
Is Natural Alternatives International, Inc. Growing?
Natural Alternatives International, Inc. has reduced its earnings per share by an average of 12% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 17%.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Natural Alternatives International, Inc. Been A Good Investment?
Natural Alternatives International, Inc. has not done too badly by shareholders, with a total return of 9.9%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared the total CEO remuneration paid by Natural Alternatives International, 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.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling Natural Alternatives International shares (free trial).
If you want to buy a stock that is better than Natural Alternatives International, this free list of high return, low debt companies is a great place to look.
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 email@example.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.