Don Young became the CEO of Aspen Aerogels, Inc. (NYSE:ASPN) in 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Don Young's Compensation Compare With Similar Sized Companies?
According to our data, Aspen Aerogels, Inc. has a market capitalization of US$71m, and pays its CEO total annual compensation worth US$1.4m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$495k. 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$423k.
It would therefore appear that Aspen Aerogels, Inc. pays Don Young 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.
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 49% each year (measured with a line of best fit). Its revenue is down -6.5% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. 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?
With a three year total loss of 30%, Aspen Aerogels, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Aspen Aerogels, 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.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Aspen Aerogels shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.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.