In 2015 Simon Raab was appointed CEO of FARO Technologies Inc (NASDAQ:FARO). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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?
Our data indicates that FARO Technologies Inc is worth US$791m, and total annual CEO compensation is US$2.5m. Notably, that’s an increase of 34% over the year before. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.2m.
That means Simon Raab receives fairly typical remuneration for the CEO of a company that size. 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 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. Its revenue is up 15% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has FARO Technologies Inc Been A Good Investment?
Boasting a total shareholder return of 74% over three years, FARO Technologies Inc has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
Simon Raab is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at FARO Technologies Inc.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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 email@example.com.