John Fan became the CEO of Kopin Corporation (NASDAQ:KOPN) in 1984. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does John Fan’s Compensation Compare With Similar Sized Companies?
According to our data, Kopin Corporation has a market capitalization of US$89m, and pays its CEO total annual compensation worth US$2.3m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$559k. 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$481k.
It would therefore appear that Kopin Corporation pays John Fan 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. 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 Kopin has changed over time.
Is Kopin Corporation Growing?
Over the last three years Kopin Corporation has shrunk its earnings per share by an average of 12% per year (measured with a line of best fit). In the last year, its revenue is down -16%.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Kopin Corporation Been A Good Investment?
Given the total loss of 48% over three years, many shareholders in Kopin Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Kopin Corporation with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Kopin shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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