Lee-Lean Shu became the CEO of GSI Technology, Inc. (NASDAQ:GSIT) in 1995. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Lee-Lean Shu's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that GSI Technology, Inc. has a market cap of US$187m, and is paying total annual CEO compensation of US$1.0m. (This number is for the twelve months until March 2019). We note that's an increase of 50% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$419k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.2m.
So Lee-Lean Shu is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at GSI Technology has changed over time.
Is GSI Technology, Inc. Growing?
GSI Technology, Inc. has reduced its earnings per share by an average of 1.1% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 23% over the last year.
In the last three years the company has failed to grow earnings per share. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has GSI Technology, Inc. Been A Good Investment?
Boasting a total shareholder return of 70% over three years, GSI Technology, Inc. has done well by shareholders. 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.
Lee-Lean Shu is paid around what is normal the leaders of comparable size companies.
The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. Whatever your view on compensation, you might want to check if insiders are buying or selling GSI Technology shares (free trial).
Important note: GSI Technology 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.
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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.