In 2015 George Kirby was appointed CEO of Ocean Power Technologies, Inc. (NASDAQ:OPTT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does George Kirby's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Ocean Power Technologies, Inc. has a market cap of US$8.7m, and reported total annual CEO compensation of US$720k for the year to April 2019. That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$391k. 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$510k.
Thus we can conclude that George Kirby receives more in total compensation than the median of a group of companies in the same market, and of similar size to Ocean Power Technologies, Inc.. 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.
You can see a visual representation of the CEO compensation at Ocean Power Technologies, below.
Is Ocean Power Technologies, Inc. Growing?
Over the last three years Ocean Power Technologies, Inc. has grown its earnings per share (EPS) by an average of 92% per year (using a line of best fit). Its revenue is up 131% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Ocean Power Technologies, Inc. Been A Good Investment?
Given the total loss of 98% over three years, many shareholders in Ocean Power Technologies, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Ocean Power Technologies, Inc. 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ocean Power Technologies (free visualization of insider trades).
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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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.