Dan McGahn became the CEO of American Superconductor Corporation (NASDAQ:AMSC) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Dan McGahn's Compensation Compare With Similar Sized Companies?
According to our data, American Superconductor Corporation has a market capitalization of US$244m, and pays its CEO total annual compensation worth US$1.4m. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at US$500k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.
That means Dan McGahn receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at American Superconductor has changed from year to year.
Is American Superconductor Corporation Growing?
On average over the last three years, American Superconductor Corporation has grown earnings per share (EPS) by 43% each year (using a line of best fit). In the last year, its revenue is up 7.9%.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has American Superconductor Corporation Been A Good Investment?
American Superconductor Corporation has generated a total shareholder return of 7.3% over three years, so most shareholders wouldn't be too disappointed. 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.
Dan McGahn is paid around the same as most CEOs of similar size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling American Superconductor 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.
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