How Should Investors React To WidePoint's (NYSEMKT:WYY) CEO Pay?

Jin Kang has been the CEO of WidePoint Corporation (NYSEMKT:WYY) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for WidePoint

Comparing WidePoint Corporation's CEO Compensation With the industry

At the time of writing, our data shows that WidePoint Corporation has a market capitalization of US$83m, and reported total annual CEO compensation of US$461k for the year to December 2019. That's a slight decrease of 6.5% on the prior year. We note that the salary portion, which stands at US$325.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$388k. This suggests that WidePoint remunerates its CEO largely in line with the industry average. What's more, Jin Kang holds US$3.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. According to our research, WidePoint has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

WidePoint Corporation's Growth

WidePoint Corporation has seen its earnings per share (EPS) increase by 119% a year over the past three years. In the last year, its revenue is up 83%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has WidePoint Corporation Been A Good Investment?

Boasting a total shareholder return of 54% over three years, WidePoint 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.

To Conclude...

As we noted earlier, WidePoint pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for WidePoint (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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