Yahoo Finance Here's Why Rocket Lab USA, Inc.'s (NASDAQ:RKLB) CEO Compensation Is The Least Of Shareholders Concerns
Key Insights
Rocket Lab USA's Annual General Meeting to take place on 12th of June
Salary of US$500.0k is part of CEO Peter Beck's total remuneration
Total compensation is 75% below industry average
Over the past three years, Rocket Lab USA's EPS grew by 32% and over the past three years, the total loss to shareholders 58%
Performance at Rocket Lab USA, Inc. (NASDAQ:RKLB) has been rather uninspiring recently and shareholders may be wondering how CEO Peter Beck plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 12th of June. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
See our latest analysis for Rocket Lab USA
How Does Total Compensation For Peter Beck Compare With Other Companies In The Industry?
Our data indicates that Rocket Lab USA, Inc. has a market capitalization of US$2.1b, and total annual CEO compensation was reported as US$963k for the year to December 2023. We note that's an increase of 15% above last year. In particular, the salary of US$500.0k, makes up a fairly large portion of the total compensation being paid to the CEO.
In comparison with other companies in the American Aerospace & Defense industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$3.8m. In other words, Rocket Lab USA pays its CEO lower than the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$500k | US$487k | 52% |
Other | US$463k | US$351k | 48% |
Total Compensation | US$963k | US$838k | 100% |
Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. It's interesting to note that Rocket Lab USA pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Rocket Lab USA, Inc.'s Growth
Over the past three years, Rocket Lab USA, Inc. has seen its earnings per share (EPS) grow by 32% per year. Its revenue is up 25% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Rocket Lab USA, Inc. Been A Good Investment?
Few Rocket Lab USA, Inc. shareholders would feel satisfied with the return of -58% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Rocket Lab USA that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
