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Should You Worry About Vicor Corporation’s (NASDAQ:VICR) CEO Pay?

Patrizio Vinciarelli became the CEO of Vicor Corporation (NASDAQ:VICR) in 1981. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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.

View our latest analysis for Vicor

How Does Patrizio Vinciarelli’s Compensation Compare With Similar Sized Companies?

Our data indicates that Vicor Corporation is worth US$1.5b, and total annual CEO compensation is US$2.1m. (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$390k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO compensation of that group was US$3.7m.

A first glance this seems like a real positive for shareholders, since Patrizio Vinciarelli is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Vicor has changed from year to year.

NasdaqGS:VICR CEO Compensation January 4th 19
NasdaqGS:VICR CEO Compensation January 4th 19

Is Vicor Corporation Growing?

On average over the last three years, Vicor Corporation has grown earnings per share (EPS) by 73% each year. In the last year, its revenue is up 27%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Vicor Corporation Been A Good Investment?

Boasting a total shareholder return of 345% over three years, Vicor Corporation has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.

In Summary…

It appears that Vicor Corporation remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Patrizio Vinciarelli deserves a raise!

It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. Shareholders may want to check for free if Vicor insiders are buying or selling shares.

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

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 editorial-team@simplywallst.com.

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