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Daniel Baker became the CEO of NVE Corporation (NASDAQ:NVEC) in 2001. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for NVE
How Does Daniel Baker’s Compensation Compare With Similar Sized Companies?
Our data indicates that NVE Corporation is worth US$470m, and total annual CEO compensation is US$394k. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$300k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.6m.
Most shareholders would consider it a positive that Daniel Baker takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at NVE has changed from year to year.
Is NVE Corporation Growing?
NVE Corporation has increased its earnings per share (EPS) by an average of 8.3% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just -0.1%.
I generally like to see a little revenue growth, but it is good to see EPS growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has NVE Corporation Been A Good Investment?
Boasting a total shareholder return of 99% over three years, NVE Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
NVE Corporation is currently paying its CEO below what is normal for companies of its size.
Daniel Baker is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling NVE (free visualization of insider trades).
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.
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.