Here's Why Vicor Corporation's (NASDAQ:VICR) CEO May Deserve A Raise

By
Simply Wall St
Published
June 19, 2021
NasdaqGS:VICR
Source: Shutterstock

The impressive results at Vicor Corporation (NASDAQ:VICR) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 25 June 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Vicor

Comparing Vicor Corporation's CEO Compensation With the industry

Our data indicates that Vicor Corporation has a market capitalization of US$3.9b, and total annual CEO compensation was reported as US$143k for the year to December 2020. We note that's a decrease of 68% compared to last year. In particular, the salary of US$123.1k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.2m. That is to say, Patrizio Vinciarelli is paid under the industry median. What's more, Patrizio Vinciarelli holds US$1.9b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$123k US$397k 86%
Other US$20k US$54k 14%
Total CompensationUS$143k US$451k100%

Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. It's interesting to note that Vicor pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
NasdaqGS:VICR CEO Compensation June 20th 2021

A Look at Vicor Corporation's Growth Numbers

Vicor Corporation's earnings per share (EPS) grew 84% per year over the last three years. It achieved revenue growth of 24% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Vicor Corporation Been A Good Investment?

Most shareholders would probably be pleased with Vicor Corporation for providing a total return of 94% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

Whatever your view on compensation, you might want to check if insiders are buying or selling Vicor shares (free trial).

Switching gears from Vicor, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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. 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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