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Suresh Venkatesan became the CEO of POET Technologies Inc. (CVE:PTK) in 2015. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Suresh Venkatesan’s Compensation Compare With Similar Sized Companies?
According to our data, POET Technologies Inc. has a market capitalization of CA$102m, and pays its CEO total annual compensation worth US$1.0m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$440k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$119k.
It would therefore appear that POET Technologies Inc. pays Suresh Venkatesan more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at POET Technologies has changed from year to year.
Is POET Technologies Inc. Growing?
Over the last three years POET Technologies Inc. has grown its earnings per share (EPS) by an average of 9.9% per year (using a line of best fit). In the last year, its revenue is up 22%.
I would argue that the modest growth in revenue is a notable positive. And the improvement in earnings per share is modest but respectable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has POET Technologies Inc. Been A Good Investment?
With a three year total loss of 65%, POET Technologies Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount POET Technologies Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling POET Technologies shares (free trial).
Important note: POET Technologies 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.