David Bywater has been the CEO of Vivint Solar, Inc. (NYSE:VSLR) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.
How Does David Bywater's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Vivint Solar, Inc. has a market cap of US$1.1b, and reported total annual CEO compensation of US$3.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$660k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.5m.
It would therefore appear that Vivint Solar, Inc. pays David Bywater 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 Vivint Solar has changed from year to year.
Is Vivint Solar, Inc. Growing?
Vivint Solar, Inc. has reduced its earnings per share by an average of 29% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 12% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Vivint Solar, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Vivint Solar, Inc. for providing a total return of 190% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Vivint Solar, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth 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 Vivint Solar shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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