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Is Unico American Corporation (NASDAQ:UNAM) Overpaying Its CEO?

Simply Wall St

In 2009 Cary Cheldin was appointed CEO of Unico American Corporation ( NASDAQ:UNAM ). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.

View our latest analysis for Unico American

How Does Cary Cheldin's Compensation Compare With Similar Sized Companies?

Our data indicates that Unico American Corporation is worth US$32m, and total annual CEO compensation is US$357k. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$331k. 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$497k.

So Cary Cheldin is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Unico American has changed over time.

NasdaqGM:UNAM CEO Compensation, September 17th 2019

Is Unico American Corporation Growing?

Unico American Corporation has reduced its earnings per share by an average of 14% a year, over the last three years (measured with a line of best fit). Its revenue is down -14% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Unico American Corporation Been A Good Investment?

Since shareholders would have lost about 48% over three years, some Unico American Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Cary Cheldin is paid around what is normal the leaders of comparable size companies.

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Unico American (free visualization of insider trades).

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.

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.