In 1984 John Fan was appointed CEO of Kopin Corporation (NASDAQ:KOPN). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does John Fan's Compensation Compare With Similar Sized Companies?
Our data indicates that Kopin Corporation is worth US$46m, and total annual CEO compensation was reported as US$2.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$559k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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$510k.
As you can see, John Fan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Kopin Corporation is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Kopin has changed over time.
Is Kopin Corporation Growing?
Over the last three years Kopin Corporation has shrunk its earnings per share by an average of 10% per year (measured with a line of best fit). It saw its revenue drop 5.5% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Kopin Corporation Been A Good Investment?
With a three year total loss of 73%, Kopin Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Kopin 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.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Kopin.
If you want to buy a stock that is better than Kopin, this free list of high return, low debt companies is a great place to look.
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