Here's Why Shareholders May Want To Be Cautious With Increasing Atomera Incorporated's (NASDAQ:ATOM) CEO Pay Packet

Key Insights

• Atomera to hold its Annual General Meeting on 15th of May
• CEO Scott Bibaud's total compensation includes salary of US$440.8k
• The total compensation is 67% higher than the average for the industry
• Atomera's three-year loss to shareholders was 38% while its EPS grew by 2.8% over the past three years

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In the past three years, the share price of Atomera Incorporated (NASDAQ:ATOM) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Atomera

How Does Total Compensation For Scott Bibaud Compare With Other Companies In The Industry?

Our data indicates that Atomera Incorporated has a market capitalization of US$185m, and total annual CEO compensation was reported as US$2.0m for the year to December 2024. We note that's an increase of 11% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$441k.

On comparing similar companies from the American Semiconductor industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.2m. Accordingly, our analysis reveals that Atomera Incorporated pays Scott Bibaud north of the industry median. Moreover, Scott Bibaud also holds US$2.2m worth of Atomera 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$441k	US$418k	22%
Other	US$1.6m	US$1.4m	78%
Total Compensation	US$2.0m	US$1.8m	100%

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. According to our research, Atomera has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Atomera Incorporated's Growth Numbers

Atomera Incorporated has seen its earnings per share (EPS) increase by 2.8% a year over the past three years. It saw its revenue drop 79% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Atomera Incorporated Been A Good Investment?

The return of -38% over three years would not have pleased Atomera Incorporated shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which can't be ignored) in Atomera we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.