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Is Centrus Energy Corp’s (NYSEMKT:LEU) CEO Incentives Align With Yours?

In 2015 Dan Poneman was appointed CEO of Centrus Energy Corp (NYSEMKT:LEU). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Centrus Energy

How Does Dan Poneman’s Compensation Compare With Similar Sized Companies?

According to our data, Centrus Energy Corp has a market capitalization of US$20m, and pays its CEO total annual compensation worth US$2m. That’s a modest increase of 6.4% on the prior year year. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$292k.

It would therefore appear that Centrus Energy Corp pays Dan Poneman 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.

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

AMEX:LEU CEO Compensation November 8th 18

Is Centrus Energy Corp Growing?

Over the last three years Centrus Energy Corp has grown its earnings per share (EPS) by an average of 58% per year. Its revenue is up 16% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Centrus Energy Corp Been A Good Investment?

With a three year total loss of 14%, Centrus Energy Corp would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared the total CEO remuneration paid by Centrus Energy Corp, 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. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Shareholders may want to check for free if Centrus Energy Corp insiders are buying or selling shares.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

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.