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Neil Koehler has been the CEO of Pacific Ethanol, Inc. (NASDAQ:PEIX) since 1970. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Neil Koehler’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Pacific Ethanol, Inc. has a market cap of US$52m, and is paying total annual CEO compensation of US$931k. (This figure is for the year to December 2018). That’s less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$485k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$451k.
Thus we can conclude that Neil Koehler receives more in total compensation than the median of a group of companies in the same market, and of similar size to Pacific Ethanol, Inc.. 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 Pacific Ethanol has changed over time.
Is Pacific Ethanol, Inc. Growing?
On average over the last three years, Pacific Ethanol, Inc. has shrunk earnings per share by 53% each year (measured with a line of best fit). Its revenue is down -11% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Pacific Ethanol, Inc. Been A Good Investment?
Since shareholders would have lost about 84% over three years, some Pacific Ethanol, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Pacific Ethanol, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if Pacific Ethanol insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.