Is BIO-key International, Inc.'s (NASDAQ:BKYI) CEO Pay Justified?
Mike DePasquale became the CEO of BIO-key International, Inc. (NASDAQ:BKYI) in 2003. 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 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.
Check out our latest analysis for BIO-key International
How Does Mike DePasquale's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that BIO-key International, Inc. has a market cap of US$7.9m, and reported total annual CEO compensation of US$333k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$275k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$506k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at BIO-key International, below.
Is BIO-key International, Inc. Growing?
Over the last three years BIO-key International, Inc. has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). In the last year, its revenue is down 33%.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.
Has BIO-key International, Inc. Been A Good Investment?
Since shareholders would have lost about 83% over three years, some BIO-key International, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
BIO-key International, Inc. is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Mike DePasquale receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling BIO-key International (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.
