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Shareholders May Be Wary Of Increasing LightPath Technologies, Inc.'s (NASDAQ:LPTH) CEO Compensation Package
Key Insights
- LightPath Technologies' Annual General Meeting to take place on 16th of November
- Salary of US$360.5k is part of CEO Sam Rubin's total remuneration
- The total compensation is similar to the average for the industry
- LightPath Technologies' EPS declined by 66% over the past three years while total shareholder loss over the past three years was 49%
LightPath Technologies, Inc. (NASDAQ:LPTH) has not performed well recently and CEO Sam Rubin will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 16th of November. 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.
Check out our latest analysis for LightPath Technologies
Comparing LightPath Technologies, Inc.'s CEO Compensation With The Industry
According to our data, LightPath Technologies, Inc. has a market capitalization of US$56m, and paid its CEO total annual compensation worth US$554k over the year to June 2023. Notably, that's an increase of 23% over the year before. We note that the salary portion, which stands at US$360.5k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the American Electronic industry with market capitalizations below US$200m, reported a median total CEO compensation of US$498k. From this we gather that Sam Rubin is paid around the median for CEOs in the industry. Furthermore, Sam Rubin directly owns US$151k worth of shares in the company.
On an industry level, roughly 32% of total compensation represents salary and 68% is other remuneration. It's interesting to note that LightPath Technologies pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
LightPath Technologies, Inc.'s Growth
Over the last three years, LightPath Technologies, Inc. has shrunk its earnings per share by 66% per year. It saw its revenue drop 7.4% over the last year.
Overall this is not a very positive result for shareholders. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has LightPath Technologies, Inc. Been A Good Investment?
The return of -49% over three years would not have pleased LightPath Technologies, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 4 warning signs for LightPath Technologies that investors should look into moving forward.
Important note: LightPath Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
About NasdaqCM:LPTH
LightPath Technologies
Designs, develops, manufactures, and distributes optical systems and assemblies in the United States.
Flawless balance sheet with low risk.
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