Is Aspen Aerogels, Inc.'s (NYSE:ASPN) CEO Pay Justified?

Don Young became the CEO of Aspen Aerogels, Inc. (NYSE:ASPN) in 2001. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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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See our latest analysis for Aspen Aerogels

How Does Don Young's Compensation Compare With Similar Sized Companies?

Our data indicates that Aspen Aerogels, Inc. is worth US$120m, and total annual CEO compensation is US$1.4m. (This is based on the year to December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$510k. 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$450k.

It would therefore appear that Aspen Aerogels, Inc. pays Don Young more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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 a visual representation of the CEO compensation at Aspen Aerogels, below.

Is Aspen Aerogels, Inc. Growing?

On average over the last three years, Aspen Aerogels, Inc. has shrunk earnings per share by 47% each year (measured with a line of best fit). It saw its revenue drop -2.2% over the last year.

Few shareholders would be pleased to read that earnings per share are lower 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 Aspen Aerogels, Inc. Been A Good Investment?

Aspen Aerogels, Inc. has served shareholders reasonably well, with a total return of 17% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by Aspen Aerogels, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the CEO pay is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Aspen Aerogels.

Important note: Aspen Aerogels may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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 editorial-team@simplywallst.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.