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Is Envision Solar International, Inc.'s (NASDAQ:EVSI) CEO Pay Justified?

Simply Wall St

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Desmond Wheatley has been the CEO of Envision Solar International, Inc. (NASDAQ:EVSI) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Envision Solar International

How Does Desmond Wheatley's Compensation Compare With Similar Sized Companies?

According to our data, Envision Solar International, Inc. has a market capitalization of US$29m, and pays its CEO total annual compensation worth US$250k. (This number is for the twelve months until December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$200k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$452k.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Envision Solar International has changed from year to year.

NasdaqCM:EVSI CEO Compensation, June 20th 2019

Is Envision Solar International, Inc. Growing?

Over the last three years Envision Solar International, Inc. has shrunk its earnings per share by an average of 8.4% per year (measured with a line of best fit). It achieved revenue growth of 14% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Envision Solar International, Inc. Been A Good Investment?

With a three year total loss of 20%, Envision Solar International, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Envision Solar International, Inc. is currently paying its CEO below what is normal for companies of its size.

The compensation paid to Desmond Wheatley is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. Shareholders may want to check for free if Envision Solar International insiders are buying or selling shares.

If you want to buy a stock that is better than Envision Solar International, this free list of high return, low debt companies is a great place to look.

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.