Yahoo Finance Why American Superconductor's (NASDAQ:AMSC) CEO Pay Matters
This article will reflect on the compensation paid to Dan McGahn who has served as CEO of American Superconductor Corporation (NASDAQ:AMSC) since 2011. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for American Superconductor.
View our latest analysis for American Superconductor
How Does Total Compensation For Dan McGahn Compare With Other Companies In The Industry?
According to our data, American Superconductor Corporation has a market capitalization of US$712m, and paid its CEO total annual compensation worth US$2.1m over the year to March 2020. We note that's a decrease of 27% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$500k.
On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$2.1m. This suggests that American Superconductor remunerates its CEO largely in line with the industry average. Moreover, Dan McGahn also holds US$17m worth of American Superconductor stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$500k | US$500k | 24% |
Other | US$1.6m | US$2.4m | 76% |
Total Compensation | US$2.1m | US$2.9m | 100% |
On an industry level, around 26% of total compensation represents salary and 74% is other remuneration. There isn't a significant difference between American Superconductor and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at American Superconductor Corporation's Growth Numbers
American Superconductor Corporation's earnings per share (EPS) grew 3.9% per year over the last three years. In the last year, its revenue is up 39%.
It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has American Superconductor Corporation Been A Good Investment?
Boasting a total shareholder return of 448% over three years, American Superconductor Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As previously discussed, Dan is compensated close to the median for companies of its size, and which belong to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. On the other hand, shareholder returns over the same period have been very healthy. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 4 warning signs for American Superconductor that investors should be aware of in a dynamic business environment.
Switching gears from American Superconductor, 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.
This article by Simply Wall St is general in nature. 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.
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