In 2007 Eric McAfee was appointed CEO of Aemetis, Inc. (NASDAQ:AMTX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Eric McAfee's Compensation Compare With Similar Sized Companies?
According to our data, Aemetis, Inc. has a market capitalization of US$21m, and paid its CEO total annual compensation worth US$350k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$310k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$506k.
Most shareholders would consider it a positive that Eric McAfee takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Aemetis has changed over time.
Is Aemetis, Inc. Growing?
On average over the last three years, Aemetis, Inc. has shrunk earnings per share by 23% each year (measured with a line of best fit). Its revenue is up 6.1% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Aemetis, Inc. Been A Good Investment?
Given the total loss of 46% over three years, many shareholders in Aemetis, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that Aemetis, Inc. remunerates its CEO below most similar sized companies.
Shareholders should note that compensation for Eric McAfee is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Whatever your view on compensation, you might want to check if insiders are buying or selling Aemetis shares (free trial).
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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