Dan Poneman became the CEO of Centrus Energy Corp. (NYSEMKT:LEU) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dan Poneman's Compensation Compare With Similar Sized Companies?
Our data indicates that Centrus Energy Corp. is worth US$29m, and total annual CEO compensation is US$1.9m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$750k. 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$431k.
It would therefore appear that Centrus Energy Corp. pays Dan Poneman more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Centrus Energy, below.
Is Centrus Energy Corp. Growing?
Over the last three years Centrus Energy Corp. has grown its earnings per share (EPS) by an average of 60% per year (using a line of best fit). It saw its revenue drop -12% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Centrus Energy Corp. Been A Good Investment?
With a three year total loss of 14%, Centrus Energy Corp. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Centrus Energy Corp., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Centrus Energy (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.