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Balu Balakrishnan became the CEO of Power Integrations, Inc. (NASDAQ:POWI) in 2002. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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 Balu Balakrishnan's Compensation Compare With Similar Sized Companies?
According to our data, Power Integrations, Inc. has a market capitalization of US$2.0b, and pays its CEO total annual compensation worth US$5.0m. (This figure is for the year to December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$593k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
So Balu Balakrishnan is paid around the average of the companies we looked at. 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 Power Integrations, below.
Is Power Integrations, Inc. Growing?
Over the last three years, Power Integrations, Inc. has not seen its earnings per share change much, though there is a positive trend. It saw its revenue drop -6.5% over the last year.
I would prefer it if there was revenue growth, but I'm happy with the modest EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Power Integrations, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Power Integrations, Inc. for providing a total return of 36% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Balu Balakrishnan is close enough to the median pay for a CEO of a similar sized company .
While the growth could be better, the shareholder returns are clearly good. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Power Integrations shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.