This Is The Reason Why We Think CPS Technologies Corporation's (NASDAQ:CPSH) CEO Deserves A Bump Up To Their Compensation
The impressive results at CPS Technologies Corporation (NASDAQ:CPSH) recently will be great news for shareholders. At the upcoming AGM on 23 April 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
See our latest analysis for CPS Technologies
Comparing CPS Technologies Corporation's CEO Compensation With the industry
At the time of writing, our data shows that CPS Technologies Corporation has a market capitalization of US$118m, and reported total annual CEO compensation of US$208k for the year to December 2020. Notably, that's an increase of 12% over the year before. We note that the salary portion, which stands at US$196.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$461k. Accordingly, CPS Technologies pays its CEO under the industry median. Moreover, Grant Bennett also holds US$12m worth of CPS Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$196k | US$170k | 94% |
Other | US$12k | US$16k | 6% |
Total Compensation | US$208k | US$186k | 100% |
Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. CPS Technologies is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at CPS Technologies Corporation's Growth Numbers
CPS Technologies Corporation's earnings per share (EPS) grew 60% per year over the last three years. It saw its revenue drop 2.8% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has CPS Technologies Corporation Been A Good Investment?
We think that the total shareholder return of 543%, over three years, would leave most CPS Technologies Corporation shareholders smiling. 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.
In Summary...
Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for CPS Technologies that investors should look into moving forward.
Switching gears from CPS Technologies, 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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