Rob Willett has been the CEO of Cognex Corporation (NASDAQ:CGNX) since 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Rob Willett's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Cognex Corporation has a market cap of US$7.3b, and reported total annual CEO compensation of US$3.8m for the year to December 2019. We note that's an increase of 50% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$376k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$7.6m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Cognex stands. Speaking on an industry level, we can see that nearly 34% of total compensation represents salary, while the remainder of 66% is other remuneration. It's interesting to note that Cognex allocates a smaller portion of compensation to salary in comparison to the broader industry.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at Cognex has changed from year to year.
Is Cognex Corporation Growing?
Cognex Corporation has increased its earnings per share (EPS) by an average of 4.1% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 10%.
I generally like to see a little revenue growth, but the improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has Cognex Corporation Been A Good Investment?
With a total shareholder return of 6.4% over three years, Cognex Corporation has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It looks like Cognex Corporation pays its CEO less than similar sized companies.
Rob Willett receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, from my perspective. So shareholders may not be elated, but they shouldn't be worried about the CEO compensation, either. Moving away from CEO compensation for the moment, we've identified 1 warning sign for Cognex that you should be aware of before investing.
If you want to buy a stock that is better than Cognex, this free list of high return, low debt companies is a great place to look.
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