Should Shareholders Reconsider Image Sensing Systems, Inc.'s (NASDAQ:ISNS) CEO Compensation Package?
The results at Image Sensing Systems, Inc. (NASDAQ:ISNS) have been quite disappointing recently and CEO Chad Stelzig bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 04 May 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Image Sensing Systems
How Does Total Compensation For Chad Stelzig Compare With Other Companies In The Industry?
At the time of writing, our data shows that Image Sensing Systems, Inc. has a market capitalization of US$24m, and reported total annual CEO compensation of US$321k for the year to December 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is US$262.5k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$429k. From this we gather that Chad Stelzig is paid around the median for CEOs in the industry. Furthermore, Chad Stelzig directly owns US$198k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$263k | US$260k | 82% |
Other | US$58k | US$58k | 18% |
Total Compensation | US$321k | US$318k | 100% |
On an industry level, around 29% of total compensation represents salary and 71% is other remuneration. According to our research, Image Sensing Systems has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Image Sensing Systems, Inc.'s Growth
Image Sensing Systems, Inc. has reduced its earnings per share by 21% a year over the last three years. It saw its revenue drop 11% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Image Sensing Systems, Inc. Been A Good Investment?
With a three year total loss of 2.4% for the shareholders, Image Sensing Systems, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Image Sensing Systems that you should be aware of before investing.
Switching gears from Image Sensing Systems, 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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