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Does Plug Power Inc.'s (NASDAQ:PLUG) CEO Pay Reflect Performance?

Simply Wall St

In 2008 Andy Marsh was appointed CEO of Plug Power Inc. (NASDAQ:PLUG). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Plug Power

How Does Andy Marsh's Compensation Compare With Similar Sized Companies?

According to our data, Plug Power Inc. has a market capitalization of US$476m, and pays its CEO total annual compensation worth US$2.7m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.9m.

As you can see, Andy Marsh is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Plug Power Inc. is paying too much. 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 Plug Power, below.

NasdaqCM:PLUG CEO Compensation, August 15th 2019

Is Plug Power Inc. Growing?

Over the last three years Plug Power Inc. has shrunk its earnings per share by an average of 2.5% per year (measured with a line of best fit). Its revenue is up 48% over last year.

Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Plug Power Inc. Been A Good Investment?

Plug Power Inc. has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. 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.

In Summary...

We compared total CEO remuneration at Plug Power Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. So you may want to check if insiders are buying Plug Power shares with their own money (free access).

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 editorial-team@simplywallst.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.