Subodh Kulkarni became the CEO of CyberOptics Corporation (NASDAQ:CYBE) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for CyberOptics.
Comparing CyberOptics Corporation's CEO Compensation With the industry
Our data indicates that CyberOptics Corporation has a market capitalization of US$205m, and total annual CEO compensation was reported as US$764k for the year to December 2019. That's a notable decrease of 25% on last year. In particular, the salary of US$400.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$843k. This suggests that CyberOptics remunerates its CEO largely in line with the industry average. Moreover, Subodh Kulkarni also holds US$2.9m worth of CyberOptics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. CyberOptics is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
CyberOptics Corporation's Growth
Over the last three years, CyberOptics Corporation has shrunk its earnings per share by 15% per year. In the last year, its revenue is up 16%.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has CyberOptics Corporation Been A Good Investment?
We think that the total shareholder return of 84%, over three years, would leave most CyberOptics Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we noted earlier, CyberOptics pays its CEO in line with similar-sized companies belonging to the same industry. Investors will be happy that CyberOptics has produced strong shareholder returns for the past three years. Meanwhile, revenues have been increasing recently However, on a concerning note, EPS is not growing. However, considering overall positive performance, we think Subodh, shareholders might not be too worried about the CEO's compensation.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for CyberOptics that you should be aware of before investing.
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. 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.
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