Is Axon Enterprise, Inc.'s (NASDAQ:AAXN) CEO Being Overpaid?

Rick Smith became the CEO of Axon Enterprise, Inc. (NASDAQ:AAXN) in 1993. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.

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How Does Rick Smith's Compensation Compare With Similar Sized Companies?

Our data indicates that Axon Enterprise, Inc. is worth US$2.7b, and total annual CEO compensation is US$3.8m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$350k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO compensation was US$5.1m.

So Rick Smith is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Axon Enterprise has changed from year to year.

Is Axon Enterprise, Inc. Growing?

Over the last three years Axon Enterprise, Inc. has shrunk its earnings per share by an average of 1.9% per year. It achieved revenue growth of 21% over the last year.

In the last three years the company has failed to grow earnings per s. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Axon Enterprise, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Axon Enterprise, Inc. for providing a total return of 240% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Rick Smith is paid around what is normal the leaders of comparable size companies.

We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Axon Enterprise.

Or you might prefer examine intentlythis intuitive graph showing past earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.