In 2012 Anthony Ambrose was appointed CEO of Data I/O Corporation (NASDAQ:DAIO). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Anthony Ambrose’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Data I/O Corporation has a market cap of US$22m, and reported total annual CEO compensation of US$893k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$330k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$605k.
Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where Data I/O stands. On a sector level, around 34% of total compensation represents salary and 66% is other remuneration. Our data reveals that Data I/O allocates salary in line with the wider market.
Thus we can conclude that Anthony Ambrose receives more in total compensation than the median of a group of companies in the same market, and of similar size to Data I/O 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 Data I/O, below.
Is Data I/O Corporation Growing?
Data I/O Corporation has reduced its earnings per share by an average of 51% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 26% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Data I/O Corporation Been A Good Investment?
Since shareholders would have lost about 45% over three years, some Data I/O Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by Data I/O Corporation, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Shifting gears from CEO pay for a second, we’ve spotted 3 warning signs for Data I/O you should be aware of, and 1 of them is concerning.
Important note: Data I/O 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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