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In 2015 Vince Arnone was appointed CEO of Fuel Tech, Inc. (NASDAQ:FTEK). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Vince Arnone's Compensation Compare With Similar Sized Companies?
Our data indicates that Fuel Tech, Inc. is worth US$20m, and total annual CEO compensation is US$514k. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$425k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$496k.
So Vince Arnone receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Fuel Tech has changed from year to year.
Is Fuel Tech, Inc. Growing?
Over the last three years Fuel Tech, Inc. has grown its earnings per share (EPS) by an average of 81% per year (using a line of best fit). In the last year, its revenue is down -1.1%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.
Has Fuel Tech, Inc. Been A Good Investment?
Since shareholders would have lost about 41% over three years, some Fuel Tech, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Vince Arnone is paid around what is normal the leaders of comparable size companies.
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Shareholders may want to check for free if Fuel Tech insiders are buying or selling shares.
Important note: Fuel Tech may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.