Kevin Mills became the CEO of Socket Mobile, Inc. (NASDAQ:SCKT) in 2000. 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. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Kevin Mills’s Compensation Compare With Similar Sized Companies?
According to our data, Socket Mobile, Inc. has a market capitalization of US$9.5m, and pays its CEO total annual compensation worth US$360k. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$242k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$303k.
So Kevin Mills is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance. Take a look at Socket Mobile’s profit growth by viewing this free data-rich visualization of earnings, revenue and cash flow.
The graphic below shows how CEO compensation at Socket Mobile has changed from year to year.
Is Socket Mobile, Inc. Growing?
Over the last three years Socket Mobile, Inc. has shrunk its earnings per share by an average of 24% per year. In the last year, its revenue is down -25%.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Socket Mobile, Inc. Been A Good Investment?
Since shareholders would have lost about 9.1% over three years, some Socket Mobile, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Kevin Mills is paid around what is normal the leaders of comparable size companies.
The company isn’t growing EPS, and shareholder returns have been disappointing. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. So you may want to check if insiders are buying Socket Mobile shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 email@example.com.