George Kirby became the CEO of Ocean Power Technologies, Inc. (NASDAQ:OPTT) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does George Kirby’s Compensation Compare With Similar Sized Companies?
According to our data, Ocean Power Technologies, Inc. has a market capitalization of US$5.8m, and pays its CEO total annual compensation worth US$780k. (This is based on the year to April 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$382k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$416k.
It would therefore appear that Ocean Power Technologies, Inc. pays George Kirby 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 better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Ocean Power Technologies has changed over time.
Is Ocean Power Technologies, Inc. Growing?
Ocean Power Technologies, Inc. has increased its earnings per share (EPS) by an average of 82% a year, over the last three years (using a line of best fit). It saw its revenue drop -48% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Ocean Power Technologies, Inc. Been A Good Investment?
With a three year total loss of 85%, Ocean Power Technologies, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Ocean Power Technologies, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within 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. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ocean Power Technologies (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 firstname.lastname@example.org. 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.