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Don Young has been the CEO of Aspen Aerogels, Inc. (NYSE:ASPN) since 2001. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Don Young's Compensation Compare With Similar Sized Companies?
According to our data, Aspen Aerogels, Inc. has a market capitalization of US$148m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$510k. 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 examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$509k.
Thus we can conclude that Don Young receives more in total compensation than the median of a group of companies in the same market, and of similar size to Aspen Aerogels, Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Aspen Aerogels, below.
Is Aspen Aerogels, Inc. Growing?
On average over the last three years, Aspen Aerogels, Inc. has shrunk earnings per share by 42% each year (measured with a line of best fit). Its revenue is up 8.1% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Aspen Aerogels, Inc. Been A Good Investment?
Given the total loss of 6.3% over three years, many shareholders in Aspen Aerogels, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Aspen Aerogels, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Aspen Aerogels.
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.
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 firstname.lastname@example.org. 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.