How Should Investors Feel About Aemetis, Inc.'s (NASDAQ:AMTX) CEO Pay?
Eric McAfee became the CEO of Aemetis, Inc. (NASDAQ:AMTX) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Aemetis
How Does Eric McAfee's Compensation Compare With Similar Sized Companies?
According to our data, Aemetis, Inc. has a market capitalization of US$15m, and paid its CEO total annual compensation worth US$360k over the year to December 2019. That's just a smallish increase of 2.9% on last year. 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$621k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Aemetis stands. Speaking on an industry level, we can see that nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Aemetis pays out 86% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
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. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see, below, how CEO compensation at Aemetis has changed over time.
Is Aemetis, Inc. Growing?
Aemetis, Inc. has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 17% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Aemetis, Inc. Been A Good Investment?
With a three year total loss of 42%, Aemetis, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Aemetis, Inc. is currently paying its CEO below what is normal for companies of its size.
Eric McAfee is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. 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. Taking a breather from CEO compensation, we've spotted 4 warning signs for Aemetis (of which 1 shouldn't be ignored!) you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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