Yahoo Finance Shareholders Will Probably Hold Off On Increasing Amesite Inc.'s (NASDAQ:AMST) CEO Compensation For The Time Being
Key Insights
Amesite's Annual General Meeting to take place on 18th of January
CEO Ann Sastry's total compensation includes salary of US$550.0k
The overall pay is comparable to the industry average
Over the past three years, Amesite's EPS grew by 43% and over the past three years, the total loss to shareholders 95%
In the past three years, the share price of Amesite Inc. (NASDAQ:AMST) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of January. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 Amesite
Comparing Amesite Inc.'s CEO Compensation With The Industry
Our data indicates that Amesite Inc. has a market capitalization of US$8.2m, and total annual CEO compensation was reported as US$550k for the year to June 2023. That's a notable decrease of 21% on last year. Notably, the salary of US$550k is the entirety of the CEO compensation.
In comparison with other companies in the American Consumer Services industry with market capitalizations under US$200m, the reported median total CEO compensation was US$454k. So it looks like Amesite compensates Ann Sastry in line with the median for the industry. Furthermore, Ann Sastry directly owns US$1.6m worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$550k | US$550k | 100% |
Other | - | US$150k | - |
Total Compensation | US$550k | US$700k | 100% |
On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. On a company level, Amesite prefers to reward its CEO through a salary, opting not to pay Ann Sastry through non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Amesite Inc.'s Growth Numbers
Amesite Inc.'s earnings per share (EPS) grew 43% per year over the last three years. It saw its revenue drop 25% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Amesite Inc. Been A Good Investment?
Few Amesite Inc. shareholders would feel satisfied with the return of -95% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Amesite pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
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. That's why we did our research, and identified 4 warning signs for Amesite (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Important note: Amesite is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
