Here's Why Shareholders May Want To Be Cautious With Increasing Quantum Corporation's (NASDAQ:QMCO) CEO Pay Packet

Key Insights

• Quantum to hold its Annual General Meeting on 12th of September
• Salary of US$673.5k is part of CEO Jamie Lerner's total remuneration
• The total compensation is 174% higher than the average for the industry
• Quantum's EPS grew by 2.6% over the past three years while total shareholder loss over the past three years was 88%

In the past three years, the share price of Quantum Corporation (NASDAQ:QMCO) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 12th of September. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Quantum

How Does Total Compensation For Jamie Lerner Compare With Other Companies In The Industry?

Our data indicates that Quantum Corporation has a market capitalization of US$63m, and total annual CEO compensation was reported as US$1.6m for the year to March 2023. That's a notable decrease of 35% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$673k.

For comparison, other companies in the American Tech industry with market capitalizations below US$200m, reported a median total CEO compensation of US$598k. Accordingly, our analysis reveals that Quantum Corporation pays Jamie Lerner north of the industry median. Furthermore, Jamie Lerner directly owns US$907k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$673k	US$577k	41%
Other	US$962k	US$1.9m	59%
Total Compensation	US$1.6m	US$2.5m	100%

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. Quantum is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Quantum Corporation's Growth

Over the past three years, Quantum Corporation has seen its earnings per share (EPS) grow by 2.6% per year. Its revenue is up 7.0% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Quantum Corporation Been A Good Investment?

The return of -88% over three years would not have pleased Quantum Corporation shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Quantum you should be aware of, and 1 of them is potentially serious.

Switching gears from Quantum, 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.