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Is IPG Photonics Corporation's (NASDAQ:IPGP) CEO Paid Enough Relative To Peers?

Simply Wall St
·3 min read

Valentin Gapontsev became the CEO of IPG Photonics Corporation (NASDAQ:IPGP) in 1990. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for IPG Photonics

How Does Valentin Gapontsev's Compensation Compare With Similar Sized Companies?

Our data indicates that IPG Photonics Corporation is worth US$6.8b, and total annual CEO compensation was reported as US$1.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.5m.

Most shareholders would consider it a positive that Valentin Gapontsev 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 a visual representation of the CEO compensation at IPG Photonics, below.

NasdaqGS:IPGP CEO Compensation, February 3rd 2020
NasdaqGS:IPGP CEO Compensation, February 3rd 2020

Is IPG Photonics Corporation Growing?

IPG Photonics Corporation has increased its earnings per share (EPS) by an average of 5.7% a year, over the last three years (using a line of best fit). It saw its revenue drop 10% over the last year.

I generally like to see a little revenue growth, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.

Has IPG Photonics Corporation Been A Good Investment?

IPG Photonics Corporation has served shareholders reasonably well, with a total return of 13% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

It looks like IPG Photonics Corporation pays its CEO less than similar sized companies.

Valentin Gapontsev is paid less than what is normal at similar size companies, and but overall performance has left me uninspired. However I do not find the CEO compensation to be concerning. Whatever your view on compensation, you might want to check if insiders are buying or selling IPG Photonics 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.

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.

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. Thank you for reading.