Daniel Baker has been the CEO of NVE Corporation (NASDAQ:NVEC) since 2001. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Daniel Baker's Compensation Compare With Similar Sized Companies?
Our data indicates that NVE Corporation is worth US$308m, and total annual CEO compensation was reported as US$398k for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at US$345k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.7m.
A first glance this seems like a real positive for shareholders, since Daniel Baker is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at NVE, below.
Is NVE Corporation Growing?
On average over the last three years, NVE Corporation has grown earnings per share (EPS) by 6.6% each year (using a line of best fit). In the last year, its revenue is down 17%.
I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has NVE Corporation Been A Good Investment?
NVE Corporation has served shareholders reasonably well, with a total return of 12% 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.
It looks like NVE Corporation pays its CEO less than similar sized companies.
Daniel Baker is paid less than what is normal at similar size companies, and but overall performance has left me uninspired. However I do not find the CEO compensation to be concerning. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at NVE.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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