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Is Broadwind Energy, Inc. (NASDAQ:BWEN) Overpaying Its CEO?

Asher Wright

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Stephanie Kushner has been the CEO of Broadwind Energy, Inc. (NASDAQ:BWEN) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

See our latest analysis for Broadwind Energy

How Does Stephanie Kushner’s Compensation Compare With Similar Sized Companies?

Our data indicates that Broadwind Energy, Inc. is worth US$22m, and total annual CEO compensation is US$981k. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$418k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$299k.

Thus we can conclude that Stephanie Kushner receives more in total compensation than the median of a group of companies in the same market, and of similar size to Broadwind Energy, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Broadwind Energy has changed from year to year.

NasdaqCM:BWEN CEO Compensation, February 22nd 2019

Is Broadwind Energy, Inc. Growing?

On average over the last three years, Broadwind Energy, Inc. has shrunk earnings per share by 13% each year (measured with a line of best fit). It saw its revenue drop -35% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Broadwind Energy, Inc. Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Broadwind Energy, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount Broadwind Energy, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

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

Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Broadwind Energy shares (free trial).

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.