Is Nano Dimension Ltd.’s (NASDAQ:NNDM) CEO Being Overpaid?

In 2014 Amit Dror was appointed CEO of Nano Dimension Ltd. (NASDAQ:NNDM). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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.

Check out our latest analysis for Nano Dimension

How Does Amit Dror’s Compensation Compare With Similar Sized Companies?

According to our data, Nano Dimension Ltd. has a market capitalization of US$12m, and paid its CEO total annual compensation worth US$222k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$183k. 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$506k.

A first glance this seems like a real positive for shareholders, since Amit Dror is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

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

NasdaqCM:NNDM CEO Compensation, November 12th 2019
NasdaqCM:NNDM CEO Compensation, November 12th 2019

Is Nano Dimension Ltd. Growing?

Over the last three years Nano Dimension Ltd. has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is up 172%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Nano Dimension Ltd. Been A Good Investment?

With a three year total loss of 95%, Nano Dimension Ltd. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Nano Dimension Ltd. is currently paying its CEO below what is normal for companies of its size.

Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We’re not critical of the remuneration Amit Dror receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Shareholders may want to check for free if Nano Dimension insiders are buying or selling shares.

Important note: Nano Dimension 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.