Here's Why Shareholders May Want To Be Cautious With Increasing Everspin Technologies, Inc.'s (NASDAQ:MRAM) CEO Pay Packet

Key Insights

• Everspin Technologies will host its Annual General Meeting on 22nd of May
• Total pay for CEO Sanjeev Aggarwal includes US$450.0k salary
• The total compensation is 303% higher than the average for the industry
• Everspin Technologies' EPS declined by 48% over the past three years while total shareholder return over the past three years was 4.7%

We've discovered 2 warning signs about Everspin Technologies. View them for free.

The share price of Everspin Technologies, Inc. (NASDAQ:MRAM) has struggled to grow by much over the last few years and probably has to do with the fact that earnings growth has gone backwards. Some of these issues will occupy shareholders' minds as the AGM rolls around on 22nd of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Everspin Technologies

Comparing Everspin Technologies, Inc.'s CEO Compensation With The Industry

Our data indicates that Everspin Technologies, Inc. has a market capitalization of US$138m, and total annual CEO compensation was reported as US$3.0m for the year to December 2024. We note that's an increase of 42% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$450k.

On comparing similar-sized companies in the American Semiconductor industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$750k. Hence, we can conclude that Sanjeev Aggarwal is remunerated higher than the industry median. Furthermore, Sanjeev Aggarwal directly owns US$1.3m worth of shares in the company.

Component	2024	2023	Proportion (2024)
Salary	US$450k	US$450k	15%
Other	US$2.6m	US$1.7m	85%
Total Compensation	US$3.0m	US$2.1m	100%

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Everspin Technologies pays out 15% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Everspin Technologies, Inc.'s Growth

Everspin Technologies, Inc. has reduced its earnings per share by 48% a year over the last three years. In the last year, its revenue is down 22%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Everspin Technologies, Inc. Been A Good Investment?

Everspin Technologies, Inc. has not done too badly by shareholders, with a total return of 4.7%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Everspin Technologies that you should be aware of before investing.

Important note: Everspin Technologies 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.