Tom Werner became the CEO of SunPower Corporation (NASDAQ:SPWR) in 2003. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tom Werner's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that SunPower Corporation has a market cap of US$1.9b, and is paying total annual CEO compensation of US$4.0m. (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$600k. 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$4.0m.
So Tom Werner receives a similar amount to the median CEO pay, amongst 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 a visual representation of the CEO compensation at SunPower, below.
Is SunPower Corporation Growing?
On average over the last three years, SunPower Corporation has shrunk earnings per share by 19% each year (measured with a line of best fit). Its revenue is down -16% over last year.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has SunPower Corporation Been A Good Investment?
SunPower Corporation has served shareholders reasonably well, with a total return of 30% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Tom Werner is paid around what is normal the leaders of comparable size companies.
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. Shareholders may want to check for free if SunPower insiders are buying or selling shares.
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.
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