In 1997 Paul Travers was appointed CEO of Vuzix Corporation (NASDAQ:VUZI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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 Paul Travers's Compensation Compare With Similar Sized Companies?
Our data indicates that Vuzix Corporation is worth US$83m, and total annual CEO compensation was reported as US$731k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$500k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$497k.
Thus we can conclude that Paul Travers receives more in total compensation than the median of a group of companies in the same market, and of similar size to Vuzix Corporation. 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 a visual representation of the CEO compensation at Vuzix, below.
Is Vuzix Corporation Growing?
Over the last three years Vuzix Corporation has grown its earnings per share (EPS) by an average of 9.0% per year (using a line of best fit). In the last year, its revenue is up 3.7%.
I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Vuzix Corporation Been A Good Investment?
With a three year total loss of 72%, Vuzix Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Vuzix Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Whatever your view on compensation, you might want to check if insiders are buying or selling Vuzix shares (free trial).
If you want to buy a stock that is better than Vuzix, this free list of high return, low debt companies is a great place to look.
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