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Is Aspen Aerogels Inc (NYSE:ASPN) Overpaying Its CEO?

Don Young became the CEO of Aspen Aerogels Inc (NYSE:ASPN) in 2001. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Aspen Aerogels

How Does Don Young’s Compensation Compare With Similar Sized Companies?

Our data indicates that Aspen Aerogels Inc is worth US$94m, and total annual CEO compensation is US$1m. We note that’s an increase of 182% above last year. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$297k.

As you can see, Don Young is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Aspen Aerogels Inc is paying too much. 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 Aspen Aerogels has changed over time.

NYSE:ASPN CEO Compensation November 1st 18

Is Aspen Aerogels Inc Growing?

On average over the last three years, Aspen Aerogels Inc has shrunk earnings per share by 38% each year. It achieved revenue growth of 2.9% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Aspen Aerogels Inc Been A Good Investment?

Given the total loss of 57% over three years, many shareholders in Aspen Aerogels Inc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared total CEO remuneration at Aspen Aerogels Inc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Arguably worse, investors are without a positive return for the last three years. This contrasts with the growth in CEO remuneration, year on year. In our opinion the CEO might be paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Aspen Aerogels Inc.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.