In 2007 Pat Gruber was appointed CEO of Gevo, Inc. (NASDAQ:GEVO). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Pat Gruber's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Gevo, Inc. has a market cap of US$23m, and is paying total annual CEO compensation of US$1.1m. (This is based on the year to December 2018). That's a notable increase of 109% on last year. While we always look at total compensation first, we note that the salary component is less, at US$480k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$451k.
It would therefore appear that Gevo, Inc. pays Pat Gruber more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Gevo, below.
Is Gevo, Inc. Growing?
Gevo, Inc. has increased its earnings per share (EPS) by an average of 124% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 2.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Gevo, Inc. Been A Good Investment?
Given the total loss of 99% over three years, many shareholders in Gevo, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Gevo, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. This doesn't look great when you consider CEO remuneration is up on last year. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Gevo shares with their own money (free access).
Important note: Gevo may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.