In 2015 Simon Raab was appointed CEO of FARO Technologies, Inc. ( NASDAQ:FARO ). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Simon Raab’s Compensation Compare With Similar Sized Companies?
According to our data, FARO Technologies, Inc. has a market capitalization of US$776m, and pays its CEO total annual compensation worth US$2.5m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$702k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO compensation was US$2.3m.
So Simon Raab is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at FARO Technologies has changed over time.
Is FARO Technologies, Inc. Growing?
FARO Technologies, Inc. has reduced its earnings per share by an average of 104% a year, over the last three years. In the last year, its revenue is up 15%.
Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has FARO Technologies, Inc. Been A Good Investment?
I think that the total shareholder return of 52%, over three years, would leave most FARO Technologies, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Simon Raab is paid around the same as most CEOs of similar size companies.
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. Shareholders may want to check for free if FARO Technologies insiders are buying or selling shares.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings .
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 firstname.lastname@example.org .