In 1997 Shai Gozani was appointed CEO of NeuroMetrix, Inc. (NASDAQ:NURO). 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 Shai Gozani’s Compensation Compare With Similar Sized Companies?
Our data indicates that NeuroMetrix, Inc. is worth US$6.3m, and total annual CEO compensation is US$610k. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$415k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$301k.
As you can see, Shai Gozani is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NeuroMetrix, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at NeuroMetrix has changed over time.
Is NeuroMetrix, Inc. Growing?
NeuroMetrix, Inc. has increased its earnings per share (EPS) by an average of 68% a year, over the last three years It achieved revenue growth of 8.9% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has NeuroMetrix, Inc. Been A Good Investment?
With a three year total loss of 95%, NeuroMetrix, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by NeuroMetrix, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying NeuroMetrix shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.