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It Looks Like Shareholders Would Probably Approve Genasys Inc.'s (NASDAQ:GNSS) CEO Compensation Package

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  • GNSS

The performance at Genasys Inc. (NASDAQ:GNSS) has been quite strong recently and CEO Richard Danforth has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 16 March 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Genasys

Comparing Genasys Inc.'s CEO Compensation With the industry

Our data indicates that Genasys Inc. has a market capitalization of US$233m, and total annual CEO compensation was reported as US$764k for the year to September 2020. Notably, that's an increase of 21% over the year before. In particular, the salary of US$391.3k, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.0m. This suggests that Genasys remunerates its CEO largely in line with the industry average.

Component

2020

2019

Proportion (2020)

Salary

US$391k

US$365k

51%

Other

US$373k

US$267k

49%

Total Compensation

US$764k

US$632k

100%

On an industry level, around 27% of total compensation represents salary and 73% is other remuneration. According to our research, Genasys has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

Genasys Inc.'s Growth

Over the past three years, Genasys Inc. has seen its earnings per share (EPS) grow by 125% per year. In the last year, its revenue is up 19%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Genasys Inc. Been A Good Investment?

Most shareholders would probably be pleased with Genasys Inc. for providing a total return of 203% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Genasys (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Genasys, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.