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Is Advanced Energy Industries, Inc.'s (NASDAQ:AEIS) CEO Being Overpaid?

Simply Wall St

In 2014 Yuval Wasserman was appointed CEO of Advanced Energy Industries, Inc. (NASDAQ:AEIS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Advanced Energy Industries

How Does Yuval Wasserman's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Advanced Energy Industries, Inc. has a market cap of US$2.7b, and reported total annual CEO compensation of US$4.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$700k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.

So Yuval Wasserman receives a similar amount to the median CEO pay, amongst 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 Advanced Energy Industries has changed over time.

NasdaqGS:AEIS CEO Compensation, January 7th 2020

Is Advanced Energy Industries, Inc. Growing?

Over the last three years Advanced Energy Industries, Inc. has shrunk its earnings per share by an average of 8.3% per year (measured with a line of best fit). In the last year, its revenue is down 19%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Advanced Energy Industries, Inc. Been A Good Investment?

With a total shareholder return of 24% over three years, Advanced Energy Industries, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Yuval Wasserman is paid around what is normal the leaders of comparable size companies.

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Advanced Energy Industries (free visualization of insider trades).

If you want to buy a stock that is better than Advanced Energy Industries, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.