Is POET Technologies Inc. (CVE:PTK) Overpaying Its CEO?

In 2015 Suresh Venkatesan was appointed CEO of POET Technologies Inc. (CVE:PTK). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for POET Technologies

How Does Suresh Venkatesan's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that POET Technologies Inc. has a market cap of CA$117m, and is paying total annual CEO compensation of US$2.3m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$440k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$98k.

It would therefore appear that POET Technologies Inc. pays Suresh Venkatesan 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at POET Technologies has changed from year to year.

Is POET Technologies Inc. Growing?

Over the last three years POET Technologies Inc. has grown its earnings per share (EPS) by an average of 8.9% per year (using a line of best fit). It achieved revenue growth of 87% over the last year.

It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. I wouldn't say this is necessarily top notch growth, but it is certainly promising.

Has POET Technologies Inc. Been A Good Investment?

Given the total loss of 51% over three years, many shareholders in POET Technologies Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at POET Technologies Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Whatever your view on compensation, you might want to check if insiders are buying or selling POET Technologies shares (free trial).

If you want to buy a stock that is better than POET Technologies, this free list of high return, low debt companies is a great place to look.

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.