In 2016 Todd DeBonis was appointed CEO of Pixelworks, Inc. (NASDAQ:PXLW). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Pixelworks
How Does Todd DeBonis’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Pixelworks, Inc. has a market cap of US$99m, and reported total annual CEO compensation of US$1.5m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$415k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$616k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Pixelworks. Talking in terms of the sector, salary represented approximately 16% of total compensation out of all the companies we analysed, while other remuneration made up 84% of the pie. Pixelworks pays out 27% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
As you can see, Todd DeBonis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Pixelworks, Inc. is paying too much. 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 Pixelworks, below.
Is Pixelworks, Inc. Growing?
On average over the last three years, Pixelworks, Inc. has shrunk earnings per share by 16% each year (measured with a line of best fit). Its revenue is down 10% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Pixelworks, Inc. Been A Good Investment?
With a three year total loss of 45%, Pixelworks, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We compared total CEO remuneration at Pixelworks, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, 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! Shifting gears from CEO pay for a second, we’ve spotted 5 warning signs for Pixelworks you should be aware of, and 1 of them is concerning.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.