U.S. Markets closed

Is Axon Enterprise, Inc.'s (NASDAQ:AAXN) CEO Paid Enough Relative To Peers?

Simply Wall St

In 1993 Rick Smith was appointed CEO of Axon Enterprise, Inc. (NASDAQ:AAXN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Axon Enterprise

How Does Rick Smith's Compensation Compare With Similar Sized Companies?

Our data indicates that Axon Enterprise, Inc. is worth US$3.1b, and total annual CEO compensation was reported as US$246m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$70k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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.

It would therefore appear that Axon Enterprise, Inc. pays Rick Smith more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Axon Enterprise has changed over time.

NasdaqGS:AAXN CEO Compensation, October 9th 2019

Is Axon Enterprise, Inc. Growing?

Over the last three years Axon Enterprise, Inc. has grown its earnings per share (EPS) by an average of 11% per year (using a line of best fit). It achieved revenue growth of 16% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Axon Enterprise, Inc. Been A Good Investment?

I think that the total shareholder return of 135%, over three years, would leave most Axon Enterprise, 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.

In Summary...

We compared the total CEO remuneration paid by Axon Enterprise, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Axon Enterprise shares with their own money (free access).

Important note: Axon Enterprise may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.