Tom Werner has been the CEO of SunPower Corporation (NASDAQ:SPWR) since 2003. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Tom Werner’s Compensation Compare With Similar Sized Companies?
According to our data, SunPower Corporation has a market capitalization of US$1.9b, and pays its CEO total annual compensation worth US$4.0m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$600k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
So Tom Werner receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at SunPower has changed over time.
Is SunPower Corporation Growing?
SunPower Corporation has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). Its revenue is down -16% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has SunPower Corporation Been A Good Investment?
SunPower Corporation has served shareholders reasonably well, with a total return of 32% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Tom Werner is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but and we don’t think the total returns are amazing. We’re not saying the CEO pay is too generous, but it’s probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at SunPower.
Important note: SunPower may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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