We Think Some Shareholders May Hesitate To Increase iPower Inc.'s (NASDAQ:IPW) CEO Compensation

Key Insights

• iPower to hold its Annual General Meeting on 23rd of June
• Total pay for CEO Lawrence Tan includes US$264.0k salary
• The total compensation is similar to the average for the industry
• iPower's EPS grew by 6.9% over the past three years while total shareholder loss over the past three years was 37%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

The underwhelming share price performance of iPower Inc. (NASDAQ:IPW) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 23rd of June. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for iPower

Comparing iPower Inc.'s CEO Compensation With The Industry

According to our data, iPower Inc. has a market capitalization of US$21m, and paid its CEO total annual compensation worth US$327k over the year to June 2024. This was the same amount the CEO received in the prior year. In particular, the salary of US$264.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the American Trade Distributors industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$327k. So it looks like iPower compensates Lawrence Tan in line with the median for the industry. What's more, Lawrence Tan holds US$5.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. According to our research, iPower has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at iPower Inc.'s Growth Numbers

iPower Inc. has seen its earnings per share (EPS) increase by 6.9% a year over the past three years. In the last year, its revenue is down 18%.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has iPower Inc. Been A Good Investment?

The return of -37% over three years would not have pleased iPower Inc. shareholders. 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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in iPower we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.