We Take A Look At Whether Taitron Components Incorporated's (NASDAQ:TAIT) CEO May Be Underpaid
The solid performance at Taitron Components Incorporated (NASDAQ:TAIT) has been impressive and shareholders will probably be pleased to know that CEO Stewart Wang has delivered. At the upcoming AGM on 27 May 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
See our latest analysis for Taitron Components
How Does Total Compensation For Stewart Wang Compare With Other Companies In The Industry?
Our data indicates that Taitron Components Incorporated has a market capitalization of US$34m, and total annual CEO compensation was reported as US$227k for the year to December 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at US$182.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$455k. That is to say, Stewart Wang is paid under the industry median. What's more, Stewart Wang holds US$8.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$182k | US$182k | 80% |
Other | US$45k | US$51k | 20% |
Total Compensation | US$227k | US$233k | 100% |
Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Taitron Components pays out 80% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Taitron Components Incorporated's Growth
Over the past three years, Taitron Components Incorporated has seen its earnings per share (EPS) grow by 49% per year. It achieved revenue growth of 4.6% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Taitron Components Incorporated Been A Good Investment?
Boasting a total shareholder return of 306% over three years, Taitron Components Incorporated has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Taitron Components that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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