It's Unlikely That Shareholders Will Increase Precision Optics Corporation, Inc.'s (NASDAQ:POCI) Compensation By Much This Year

Key Insights

• Precision Optics Corporation will host its Annual General Meeting on 20th of May
• Total pay for CEO Joe Forkey includes US$251.0k salary
• Total compensation is 61% below industry average
• Over the past three years, Precision Optics Corporation's EPS fell by 58% and over the past three years, the total loss to shareholders 7.8%

We've discovered 3 warning signs about Precision Optics Corporation. View them for free.

The underwhelming performance at Precision Optics Corporation, Inc. (NASDAQ:POCI) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 20th of May. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Precision Optics Corporation

How Does Total Compensation For Joe Forkey Compare With Other Companies In The Industry?

At the time of writing, our data shows that Precision Optics Corporation, Inc. has a market capitalization of US$35m, and reported total annual CEO compensation of US$251k for the year to June 2024. That's a modest increase of 4.4% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$251k.

On comparing similar-sized companies in the American Medical Equipment industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$648k. In other words, Precision Optics Corporation pays its CEO lower than the industry median. Moreover, Joe Forkey also holds US$653k worth of Precision Optics Corporation stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	US$251k	US$240k	100%
Other	-	-	-
Total Compensation	US$251k	US$240k	100%

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. At the company level, Precision Optics Corporation pays Joe Forkey solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Precision Optics Corporation, Inc.'s Growth

Precision Optics Corporation, Inc. has reduced its earnings per share by 58% a year over the last three years. In the last year, its revenue is down 2.8%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Precision Optics Corporation, Inc. Been A Good Investment?

Since shareholders would have lost about 7.8% over three years, some Precision Optics Corporation, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Precision Optics Corporation rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in Precision Optics Corporation we think you should know about.

Important note: Precision Optics Corporation is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.