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Simon Raab has been the CEO of FARO Technologies, Inc. (NASDAQ:FARO) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Simon Raab’s Compensation Compare With Similar Sized Companies?
According to our data, FARO Technologies, Inc. has a market capitalization of US$758m, and pays its CEO total annual compensation worth US$2.5m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$702k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO compensation of that group was US$2.2m.
So Simon Raab receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at FARO Technologies has changed over time.
Is FARO Technologies, Inc. Growing?
On average over the last three years, FARO Technologies, Inc. has shrunk earnings per share by 104% each year (measured with a line of best fit). It achieved revenue growth of 15% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has FARO Technologies, Inc. Been A Good Investment?
I think that the total shareholder return of 78%, over three years, would leave most FARO Technologies, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Simon Raab is paid around the same as most CEOs of similar size companies.
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at FARO Technologies.
Important note: FARO Technologies 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.
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.