Is CyberOptics Corporation’s (NASDAQ:CYBE) CEO Overpaid Relative To Its Peers?
Subodh Kulkarni became the CEO of CyberOptics Corporation (NASDAQ:CYBE) in 2014. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for CyberOptics
How Does Subodh Kulkarni’s Compensation Compare With Similar Sized Companies?
According to our data, CyberOptics Corporation has a market capitalization of US$141m, and pays its CEO total annual compensation worth US$686k. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$375k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$297k.
Thus we can conclude that Subodh Kulkarni receives more in total compensation than the median of a group of companies in the same market, and of similar size to CyberOptics Corporation. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at CyberOptics has changed from year to year.
Is CyberOptics Corporation Growing?
CyberOptics Corporation has reduced its earnings per share by an average of 5.9% a year, over the last three years (measured with a line of best fit). Its revenue is up 21% over last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has CyberOptics Corporation Been A Good Investment?
Most shareholders would probably be pleased with CyberOptics Corporation for providing a total return of 105% over three years. 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 examined the amount CyberOptics Corporation pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. So you may want to check if insiders are buying CyberOptics shares with their own money (free access).
If you want to buy a stock that is better than CyberOptics, this free list of high return, low debt companies is a great place to look.
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.
