Homi Shamir has been the CEO of Luminex Corporation (NASDAQ:LMNX) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Homi Shamir's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Luminex Corporation has a market cap of US$1.2b, and reported total annual CEO compensation of US$3.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$714k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.6m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Luminex. On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Luminex does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
That means Homi Shamir receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see a visual representation of the CEO compensation at Luminex, below.
Is Luminex Corporation Growing?
On average over the last three years, Luminex Corporation has shrunk earnings per share by 50% each year (measured with a line of best fit). It achieved revenue growth of 6.0% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Luminex Corporation Been A Good Investment?
Most shareholders would probably be pleased with Luminex Corporation for providing a total return of 53% 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.
Homi Shamir is paid around what is normal for the leaders of comparable size companies.
The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Luminex.
Important note: Luminex may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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