We Think Shareholders May Want To Consider A Review Of Aeva Technologies, Inc.'s (NYSE:AEVA) CEO Compensation Package

Key Insights

• Aeva Technologies will host its Annual General Meeting on 18th of December
• Salary of US$550.0k is part of CEO Soroush Dardashti's total remuneration
• The total compensation is 112% higher than the average for the industry
• Over the past three years, Aeva Technologies' EPS fell by 38% and over the past three years, the total loss to shareholders 96%

Aeva Technologies, Inc. (NYSE:AEVA) has not performed well recently and CEO Soroush Dardashti will probably need to up their game. At the upcoming AGM on 18th of December, shareholders can hear from the board including their plans for turning around performance. 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. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Aeva Technologies

How Does Total Compensation For Soroush Dardashti Compare With Other Companies In The Industry?

At the time of writing, our data shows that Aeva Technologies, Inc. has a market capitalization of US$130m, and reported total annual CEO compensation of US$1.1m for the year to December 2022. Notably, that's a decrease of 48% over the year before. Notably, the salary which is US$550.0k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the American Electronic industry with market capitalizations under US$200m, the reported median total CEO compensation was US$498k. Hence, we can conclude that Soroush Dardashti is remunerated higher than the industry median. Moreover, Soroush Dardashti also holds US$14m worth of Aeva Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	US$550k	US$450k	52%
Other	US$506k	US$1.6m	48%
Total Compensation	US$1.1m	US$2.0m	100%

Speaking on an industry level, nearly 31% of total compensation represents salary, while the remainder of 69% is other remuneration. Aeva Technologies is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Aeva Technologies, Inc.'s Growth

Aeva Technologies, Inc. has reduced its earnings per share by 38% a year over the last three years. Its revenue is down 58% over the previous 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 Aeva Technologies, Inc. Been A Good Investment?

The return of -96% over three years would not have pleased Aeva Technologies, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 4 warning signs for Aeva Technologies that investors should be aware of in a dynamic business environment.

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.

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.