It Looks Like The CEO Of Vuzix Corporation (NASDAQ:VUZI) May Be Underpaid Compared To Peers

Shareholders will be pleased by the impressive results for Vuzix Corporation (NASDAQ:VUZI) recently and CEO Paul Travers has played a key role. At the upcoming AGM on 17 June 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Vuzix

Comparing Vuzix Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Vuzix Corporation has a market capitalization of US$1.1b, and reported total annual CEO compensation of US$872k for the year to December 2020. We note that's an increase of 68% above last year. Notably, the salary which is US$586.7k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.0m. That is to say, Paul Travers is paid under the industry median. What's more, Paul Travers holds US$51m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$587k	US$500k	67%
Other	US$285k	US$18k	33%
Total Compensation	US$872k	US$518k	100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Vuzix is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Vuzix Corporation's Growth Numbers

Vuzix Corporation's earnings per share (EPS) grew 17% per year over the last three years. In the last year, its revenue is up 105%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Vuzix Corporation Been A Good Investment?

Most shareholders would probably be pleased with Vuzix Corporation for providing a total return of 144% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Vuzix (1 is concerning!) that you should be aware of before investing here.

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.

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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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