David Neumann became the CEO of PCTEL, Inc. (NASDAQ:PCTI) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for PCTEL.
How Does Total Compensation For David Neumann Compare With Other Companies In The Industry?
At the time of writing, our data shows that PCTEL, Inc. has a market capitalization of US$111m, and reported total annual CEO compensation of US$1.1m for the year to December 2019. That's a notable increase of 59% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$375k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$609k. Accordingly, our analysis reveals that PCTEL, Inc. pays David Neumann north of the industry median. Furthermore, David Neumann directly owns US$1.6m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. PCTEL pays out 35% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at PCTEL, Inc.'s Growth Numbers
PCTEL, Inc.'s earnings per share (EPS) grew 7.1% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.
We'd prefer higher revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has PCTEL, Inc. Been A Good Investment?
PCTEL, Inc. has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, PCTEL, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the business isn't growing EPS, and the returns to shareholders haven't been wonderful. Overall, although the company has delivered steady performance, we would like to see an improvement in key metrics before we can say the high CEO compensation is justified.
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. That's why we did some digging and identified 1 warning sign for PCTEL that investors should think about before committing capital to this stock.
Switching gears from PCTEL, 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.
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