Under the guidance of CEO Morris Young, AXT, Inc. (NASDAQ:AXTI) has performed reasonably well recently. As shareholders go into the upcoming AGM on 20 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
Comparing AXT, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that AXT, Inc. has a market capitalization of US$359m, and reported total annual CEO compensation of US$1.3m for the year to December 2020. That's a notable decrease of 39% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$445k.
In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.5m. This suggests that AXT remunerates its CEO largely in line with the industry average. What's more, Morris Young holds US$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. AXT is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at AXT, Inc.'s Growth Numbers
Over the last three years, AXT, Inc. has shrunk its earnings per share by 19% per year. It achieved revenue growth of 27% over the last year.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 AXT, Inc. Been A Good Investment?
With a total shareholder return of 31% over three years, AXT, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Although the company has performed relatively well, we still think there are some areas that could be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for AXT that investors should look into moving forward.
Switching gears from AXT, 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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