Peter Kirlin has been the CEO of Photronics, Inc. (NASDAQ:PLAB) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Peter Kirlin’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Photronics, Inc. has a market cap of US$895m, and reported total annual CEO compensation of US$1.7m for the year to October 2019. That’s just a smallish increase of 6.8% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$610k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.6m.
A first glance this seems like a real positive for shareholders, since Peter Kirlin is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Photronics has changed from year to year.
Is Photronics, Inc. Growing?
Photronics, Inc. has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). Its revenue is up 2.9% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Photronics, Inc. Been A Good Investment?
Photronics, Inc. has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Photronics, Inc. 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. The total shareholder return might not be amazing, but that doesn’t mean that Peter Kirlin is paid too much. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But it would be nice if insiders were also buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Photronics.
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.
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