Yahoo Finance Shareholders Will Probably Hold Off On Increasing Quantum Corporation's (NASDAQ:QMCO) CEO Compensation For The Time Being
Key Insights
Quantum's Annual General Meeting to take place on 12th of September
Salary of US$673.5k is part of CEO Jamie Lerner's total remuneration
Total compensation is 174% above industry average
Quantum's three-year loss to shareholders was 88% while its EPS grew by 2.6% over the past three years
The underwhelming share price performance of Quantum Corporation (NASDAQ:QMCO) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 12th of September. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Quantum
How Does Total Compensation For Jamie Lerner Compare With Other Companies In The Industry?
At the time of writing, our data shows that Quantum Corporation has a market capitalization of US$63m, and reported total annual CEO compensation of US$1.6m for the year to March 2023. Notably, that's a decrease of 35% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$673k.
For comparison, other companies in the American Tech industry with market capitalizations below US$200m, reported a median total CEO compensation of US$598k. Accordingly, our analysis reveals that Quantum Corporation pays Jamie Lerner north of the industry median. Moreover, Jamie Lerner also holds US$907k worth of Quantum stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$673k | US$577k | 41% |
Other | US$962k | US$1.9m | 59% |
Total Compensation | US$1.6m | US$2.5m | 100% |
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Quantum 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 Quantum Corporation's Growth Numbers
Quantum Corporation has seen its earnings per share (EPS) increase by 2.6% a year over the past three years. In the last year, its revenue is up 7.0%.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Quantum Corporation Been A Good Investment?
With a total shareholder return of -88% over three years, Quantum Corporation shareholders would by and large be disappointed. 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 on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Quantum (1 doesn't sit too well with us!) that you should be aware of before investing here.
Switching gears from Quantum, 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.
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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.
