We Think Some Shareholders May Hesitate To Increase Gevo, Inc.'s (NASDAQ:GEVO) CEO Compensation

Key Insights

• Gevo to hold its Annual General Meeting on 21st of May
• Total pay for CEO Pat Gruber includes US$670.8k salary
• The overall pay is 65% above the industry average
• Gevo's EPS grew by 3.5% over the past three years while total shareholder loss over the past three years was 68%

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Shareholders of Gevo, Inc. (NASDAQ:GEVO) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 21st of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Gevo

Comparing Gevo, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Gevo, Inc. has a market capitalization of US$276m, and reported total annual CEO compensation of US$3.2m for the year to December 2024. That's a notable decrease of 16% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$671k.

On examining similar-sized companies in the American Oil and Gas industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.9m. Accordingly, our analysis reveals that Gevo, Inc. pays Pat Gruber north of the industry median. Moreover, Pat Gruber also holds US$4.7m worth of Gevo stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$671k	US$635k	21%
Other	US$2.5m	US$3.1m	79%
Total Compensation	US$3.2m	US$3.7m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. It's interesting to note that Gevo pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Gevo, Inc.'s Growth

Gevo, Inc. has seen its earnings per share (EPS) increase by 3.5% a year over the past three years. In the last year, its revenue is down 1.7%.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Gevo, Inc. Been A Good Investment?

With a total shareholder return of -68% over three years, Gevo, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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 a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Gevo that investors should be aware of in a dynamic business environment.

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. 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.