Here's Why It's Unlikely That Data I/O Corporation's (NASDAQ:DAIO) CEO Will See A Pay Rise This Year

The results at Data I/O Corporation (NASDAQ:DAIO) have been quite disappointing recently and CEO Anthony Ambrose bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20 May 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Data I/O

How Does Total Compensation For Anthony Ambrose Compare With Other Companies In The Industry?

At the time of writing, our data shows that Data I/O Corporation has a market capitalization of US$43m, and reported total annual CEO compensation of US$578k for the year to December 2020. That's a slight decrease of 5.3% on the prior year. In particular, the salary of US$297.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$455k. So it looks like Data I/O compensates Anthony Ambrose in line with the median for the industry. What's more, Anthony Ambrose holds US$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$297k	US$330k	51%
Other	US$281k	US$281k	49%
Total Compensation	US$578k	US$611k	100%

On an industry level, roughly 28% of total compensation represents salary and 72% is other remuneration. Data I/O pays out 51% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Data I/O Corporation's Growth

Over the last three years, Data I/O Corporation has shrunk its earnings per share by 120% per year. It achieved revenue growth of 6.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Data I/O Corporation Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Data I/O Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Data I/O that investors should think about before committing capital to this stock.

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.

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