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Is FuelCell Energy, Inc.'s (NASDAQ:FCEL) CEO Paid Enough Relative To Peers?

Simply Wall St

Chip Bottone became the CEO of FuelCell Energy, Inc. (NASDAQ:FCEL) in 2011. First, this article will compare CEO compensation with compensation at similar sized 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 process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for FuelCell Energy

How Does Chip Bottone's Compensation Compare With Similar Sized Companies?

Our data indicates that FuelCell Energy, Inc. is worth US$34m, and total annual CEO compensation is US$1.2m. (This is based on the year to October 2018). 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$443k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$431k.

As you can see, Chip Bottone is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean FuelCell Energy, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at FuelCell Energy has changed from year to year.

NasdaqGM:FCEL CEO Compensation, April 25th 2019

Is FuelCell Energy, Inc. Growing?

On average over the last three years, FuelCell Energy, Inc. has grown earnings per share (EPS) by 31% each year (using a line of best fit). Its revenue is down -42% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.

Has FuelCell Energy, Inc. Been A Good Investment?

With a three year total loss of 96%, FuelCell Energy, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount FuelCell Energy, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. 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. Whatever your view on compensation, you might want to check if insiders are buying or selling FuelCell Energy shares (free trial).

If you want to buy a stock that is better than FuelCell Energy, 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.