We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Astrotech Corporation's (NASDAQ:ASTC) CEO For Now

Shareholders of Astrotech Corporation (NASDAQ:ASTC) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15 November 2022. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out the opportunities and risks within the US Aerospace & Defense industry.

Comparing Astrotech Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Astrotech Corporation has a market capitalization of US$22m, and reported total annual CEO compensation of US$1.2m for the year to June 2022. That's a notable increase of 36% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$450k.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$717k. Hence, we can conclude that Tom Pickens is remunerated higher than the industry median. What's more, Tom Pickens holds US$1.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	US$450k	US$435k	38%
Other	US$745k	US$445k	62%
Total Compensation	US$1.2m	US$880k	100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Astrotech pays out 38% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Astrotech Corporation's Growth Numbers

Astrotech Corporation's earnings per share (EPS) grew 65% per year over the last three years. In the last year, its revenue is up 160%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Astrotech Corporation Been A Good Investment?

The return of -64% over three years would not have pleased Astrotech Corporation shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Astrotech (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

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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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.