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Should You Worry About Nxt-ID, Inc.'s (NASDAQ:NXTD) CEO Pay Cheque?

Simply Wall St

Gino Pereira became the CEO of Nxt-ID, Inc. (NASDAQ:NXTD) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Nxt-ID

How Does Gino Pereira's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Nxt-ID, Inc. has a market cap of US$27m, and is paying total annual CEO compensation of US$1.1m. (This is based on the year to December 2018). Notably, that's an increase of 122% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$420k. 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$434k.

Thus we can conclude that Gino Pereira receives more in total compensation than the median of a group of companies in the same market, and of similar size to Nxt-ID, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Nxt-ID has changed over time.

NasdaqCM:NXTD CEO Compensation, April 23rd 2019

Is Nxt-ID, Inc. Growing?

On average over the last three years, Nxt-ID, Inc. has grown earnings per share (EPS) by 91% each year (using a line of best fit). It achieved revenue growth of 6.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has Nxt-ID, Inc. Been A Good Investment?

Given the total loss of 80% over three years, many shareholders in Nxt-ID, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Nxt-ID, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. This doesn't look great when you consider CEO remuneration is up on last year. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. So you may want to check if insiders are buying Nxt-ID shares with their own money (free access).

Important note: Nxt-ID 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 editorial-team@simplywallst.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.