Darren Jamison has been the CEO of Capstone Turbine Corporation (NASDAQ:CPST) since 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Darren Jamison’s Compensation Compare With Similar Sized Companies?
Our data indicates that Capstone Turbine Corporation is worth US$59m, and total annual CEO compensation is US$1.2m. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at US$487k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$301k.
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. 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 Capstone Turbine has changed from year to year.
Is Capstone Turbine Corporation Growing?
On average over the last three years, Capstone Turbine Corporation has grown earnings per share (EPS) by 71% each year (using a line of best fit). In the last year, its revenue is up 6.2%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Capstone Turbine Corporation Been A Good Investment?
Given the total loss of 33% over three years, many shareholders in Capstone Turbine Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Capstone Turbine Corporation pays its CEO, and compared it to the amount paid by 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. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. 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).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.