How Is Fuel Tech's (NASDAQ:FTEK) CEO Paid Relative To Peers?
This article will reflect on the compensation paid to Vince Arnone who has served as CEO of Fuel Tech, Inc. (NASDAQ:FTEK) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Fuel Tech.
View our latest analysis for Fuel Tech
How Does Total Compensation For Vince Arnone Compare With Other Companies In The Industry?
Our data indicates that Fuel Tech, Inc. has a market capitalization of US$21m, and total annual CEO compensation was reported as US$445k for the year to December 2019. That's a notable decrease of 13% on last year. In particular, the salary of US$425.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$852k. This suggests that Vince Arnone is paid below the industry median. Moreover, Vince Arnone also holds US$435k worth of Fuel Tech stock directly under their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$425k | US$425k | 95% |
Other | US$20k | US$88k | 5% |
Total Compensation | US$445k | US$513k | 100% |
On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Fuel Tech is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Fuel Tech, Inc.'s Growth
Over the past three years, Fuel Tech, Inc. has seen its earnings per share (EPS) grow by 31% per year. Its revenue is down 62% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Fuel Tech, Inc. Been A Good Investment?
Given the total shareholder loss of 2.3% over three years, many shareholders in Fuel Tech, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
Vince receives almost all of their compensation through a salary. As we touched on above, Fuel Tech, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Vince until investor returns are positive.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Fuel Tech that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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