We Think Shareholders May Want To Consider A Review Of LightPath Technologies, Inc.'s (NASDAQ:LPTH) CEO Compensation Package

Key Insights

• LightPath Technologies will host its Annual General Meeting on 20th of November
• Salary of US$378.1k is part of CEO Sam Rubin's total remuneration
• Total compensation is similar to the industry average
• LightPath Technologies' three-year loss to shareholders was 15% while its EPS was down 5.6% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at LightPath Technologies, Inc. (NASDAQ:LPTH) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th of November. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for LightPath Technologies

How Does Total Compensation For Sam Rubin Compare With Other Companies In The Industry?

According to our data, LightPath Technologies, Inc. has a market capitalization of US$62m, and paid its CEO total annual compensation worth US$478k over the year to June 2024. Notably, that's a decrease of 14% over the year before. We note that the salary portion, which stands at US$378.1k 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$384k. So it looks like LightPath Technologies compensates Sam Rubin in line with the median for the industry. What's more, Sam Rubin holds US$273k worth of shares in the company in their own name.

Component	2024	2023	Proportion (2024)
Salary	US$378k	US$361k	79%
Other	US$100k	US$193k	21%
Total Compensation	US$478k	US$554k	100%

On an industry level, roughly 28% of total compensation represents salary and 72% is other remuneration. According to our research, LightPath Technologies has allocated a higher percentage of pay to salary in comparison to the wider 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.

A Look at LightPath Technologies, Inc.'s Growth Numbers

Over the last three years, LightPath Technologies, Inc. has shrunk its earnings per share by 5.6% per year. Its revenue is down 4.7% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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?

With a three year total loss of 15% for the shareholders, LightPath Technologies, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 LightPath Technologies (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from LightPath Technologies, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.