Tim Jenks has been the CEO of NeoPhotonics Corporation (NYSE:NPTN) since 1998. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Tim Jenks’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that NeoPhotonics Corporation has a market cap of US$325m, and is paying total annual CEO compensation of US$1.6m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$500k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.5m.
So Tim Jenks receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at NeoPhotonics, below.
Is NeoPhotonics Corporation Growing?
Over the last three years NeoPhotonics Corporation has shrunk its earnings per share by an average of 105% per year. Its revenue is down -5.4% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
You might want to check this free visual report on analyst forecasts for future earnings.
Has NeoPhotonics Corporation Been A Good Investment?
Given the total loss of 16% over three years, many shareholders in NeoPhotonics Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Tim Jenks is paid around the same as most CEOs of similar size companies.
After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Suffice it to say, we don’t think the CEO is underpaid! Whatever your view on compensation, you might want to check if insiders are buying or selling NeoPhotonics shares (free trial).
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.