Yahoo Finance This Is Why Shareholders May Want To Hold Back On A Pay Rise For Vicor Corporation's (NASDAQ:VICR) CEO
Key Insights
Vicor to hold its Annual General Meeting on 21st of June
CEO Patrizio Vinciarelli's total compensation includes salary of US$442.5k
Total compensation is 86% below industry average
Over the past three years, Vicor's EPS fell by 8.2% and over the past three years, the total loss to shareholders 62%
Performance at Vicor Corporation (NASDAQ:VICR) has not been particularly rosy recently and shareholders will likely be holding CEO Patrizio Vinciarelli and the board accountable for this. At the upcoming AGM on 21st of June, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.
See our latest analysis for Vicor
Comparing Vicor Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Vicor Corporation has a market capitalization of US$1.5b, and reported total annual CEO compensation of US$821k for the year to December 2023. That's a notable increase of 25% on last year. In particular, the salary of US$442.5k, makes up a fairly large portion of the total compensation being paid to the CEO.
In comparison with other companies in the American Electrical industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$5.8m. Accordingly, Vicor pays its CEO under the industry median. Furthermore, Patrizio Vinciarelli directly owns US$715m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$442k | US$425k | 54% |
Other | US$379k | US$232k | 46% |
Total Compensation | US$821k | US$657k | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. Vicor pays out 54% of remuneration in the form of a salary, significantly higher than the industry average. 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.
Vicor Corporation's Growth
Over the last three years, Vicor Corporation has shrunk its earnings per share by 8.2% per year. In the last year, its revenue is down 4.3%.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Vicor Corporation Been A Good Investment?
With a total shareholder return of -62% over three years, Vicor Corporation shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
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 did our research and spotted 1 warning sign for Vicor that investors should look into moving forward.
Switching gears from Vicor, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
