Jeff Shealy became the CEO of Akoustis Technologies, Inc. (NASDAQ:AKTS) in 2015, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Akoustis Technologies.
See our latest analysis for Akoustis Technologies
Comparing Akoustis Technologies, Inc.’s CEO Compensation With the industry
Our data indicates that Akoustis Technologies, Inc. has a market capitalization of US$319m, and total annual CEO compensation was reported as US$885k for the year to June 2020. We note that’s an increase of 34% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$308k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$2.4m. That is to say, Jeff Shealy is paid under the industry median. Furthermore, Jeff Shealy directly owns US$24m worth of shares in the company, implying that they are deeply invested in the company’s success.
|
Component |
2020 |
2019 |
Proportion (2020) |
|
Salary |
US$308k |
US$295k |
35% |
|
Other |
US$578k |
US$364k |
65% |
|
Total Compensation |
US$885k |
US$659k |
100% |
Talking in terms of the industry, salary represented approximately 35% of total compensation out of all the companies we analyzed, while other remuneration made up 65% of the pie. Although there is a difference in how total compensation is set, Akoustis Technologies more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
A Look at Akoustis Technologies, Inc.’s Growth Numbers
Akoustis Technologies, Inc. has reduced its earnings per share by 15% a year over the last three years. In the last year, its revenue is up 24%.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Akoustis Technologies, Inc. Been A Good Investment?
With a total shareholder return of 28% over three years, Akoustis Technologies, Inc. shareholders would, in general, be reasonably content. 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.
In Summary…
As we touched on above, Akoustis Technologies, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. And revenue growth for the company is showing some positive trends.And revenues are growing at a healthy clip.And revenues are increasing at a good pace over the past year. However, shareholder returns, in comparison, did not strike us as that impressive, whileEPS growth was negative — a worrying sign. So even though we don’t think compensation is too high, shareholders will likely want to see healthier returns, before they agree Jeff deserves a raise.
CEO compensation can have a massive impact on performance, but it’s just one element. We’ve identified 3 warning signs for Akoustis Technologies that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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