Is Energous Corporation’s (NASDAQ:WATT) CEO Pay Justified?

In 2013 Steve Rizzone was appointed CEO of Energous Corporation (NASDAQ:WATT). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

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How Does Steve Rizzone’s Compensation Compare With Similar Sized Companies?

According to our data, Energous Corporation has a market capitalization of US$176m, and pays its CEO total annual compensation worth US$3.4m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$365k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO compensation of that group was US$967k.

Thus we can conclude that Steve Rizzone receives more in total compensation than the median of a group of companies in the same market, and of similar size to Energous Corporation. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Energous has changed over time.

NasdaqCM:WATT CEO Compensation January 15th 19
NasdaqCM:WATT CEO Compensation January 15th 19

Is Energous Corporation Growing?

On average over the last three years, Energous Corporation has grown earnings per share (EPS) by 1.1% each year (using a line of best fit). Its revenue is down -61% over last year.

I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. It’s hard to reach a conclusion about business performance right now. This may be one to watch.

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

Has Energous Corporation Been A Good Investment?

Most shareholders would probably be pleased with Energous Corporation for providing a total return of 90% 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.

In Summary…

We examined the amount Energous Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Energous insiders are buying or selling shares.

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

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.