It's Unlikely That Capstone Green Energy Corporation's (NASDAQ:CGRN) CEO Will See A Huge Pay Rise This Year

In the past three years, the share price of Capstone Green Energy Corporation (NASDAQ:CGRN) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 27 August 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Capstone Green Energy

Comparing Capstone Green Energy Corporation's CEO Compensation With the industry

According to our data, Capstone Green Energy Corporation has a market capitalization of US$63m, and paid its CEO total annual compensation worth US$1.3m over the year to March 2021. Notably, that's an increase of 54% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$473k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$495k. Accordingly, our analysis reveals that Capstone Green Energy Corporation pays Darren Jamison north of the industry median. What's more, Darren Jamison holds US$665k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	US$473k	US$541k	36%
Other	US$832k	US$306k	64%
Total Compensation	US$1.3m	US$847k	100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. According to our research, Capstone Green Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Capstone Green Energy Corporation's Growth

Capstone Green Energy Corporation has seen its earnings per share (EPS) increase by 7.2% a year over the past three years. It achieved revenue growth of 8.8% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Capstone Green Energy Corporation Been A Good Investment?

Few Capstone Green Energy Corporation shareholders would feel satisfied with the return of -63% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Capstone Green Energy that you should be aware of before investing.

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.
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