In 2006 Darren Jamison was appointed CEO of Capstone Turbine Corporation (NASDAQ:CPST). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Darren Jamison's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Capstone Turbine Corporation has a market cap of US$26m, and reported total annual CEO compensation of US$997k for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$515k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$491k.
Thus we can conclude that Darren Jamison receives more in total compensation than the median of a group of companies in the same market, and of similar size to Capstone Turbine Corporation. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Capstone Turbine has changed over time.
Is Capstone Turbine Corporation Growing?
Over the last three years Capstone Turbine Corporation has grown its earnings per share (EPS) by an average of 63% per year (using a line of best fit). It saw its revenue drop 3.9% over the last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Capstone Turbine Corporation Been A Good Investment?
Since shareholders would have lost about 70% over three years, some Capstone Turbine Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Capstone Turbine Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Capstone Turbine (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.