In 2008 Steve Abramson was appointed CEO of Universal Display Corporation (NASDAQ:OLED). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Steve Abramson's Compensation Compare With Similar Sized Companies?
According to our data, Universal Display Corporation has a market capitalization of US$9.8b, and paid its CEO total annual compensation worth US$6.9m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$702k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
A first glance this seems like a real positive for shareholders, since Steve Abramson is paid less than the average total compensation paid by other large companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Universal Display, below.
Is Universal Display Corporation Growing?
On average over the last three years, Universal Display Corporation has grown earnings per share (EPS) by 23% each year (using a line of best fit). It achieved revenue growth of 27% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Universal Display Corporation Been A Good Investment?
I think that the total shareholder return of 264%, over three years, would leave most Universal Display Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that Universal Display Corporation remunerates its CEO below most large companies.
Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Steve Abramson deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Universal Display shares with their own money (free access).
If you want to buy a stock that is better than Universal Display, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.