Does Nova Measuring Instruments' (NASDAQ:NVMI) CEO Salary Compare Well With The Performance Of The Company?
Eitan Oppenhaim has been the CEO of Nova Measuring Instruments Ltd. (NASDAQ:NVMI) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Nova Measuring Instruments pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Nova Measuring Instruments
How Does Total Compensation For Eitan Oppenhaim Compare With Other Companies In The Industry?
Our data indicates that Nova Measuring Instruments Ltd. has a market capitalization of US$1.4b, and total annual CEO compensation was reported as US$2.1m for the year to December 2019. That's a notable increase of 15% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$565k.
On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$4.4m. In other words, Nova Measuring Instruments pays its CEO lower than the industry median.
Component | 2019 | 2017 | Proportion (2019) |
Salary | US$565k | US$471k | 27% |
Other | US$1.5m | US$1.4m | 73% |
Total Compensation | US$2.1m | US$1.8m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. According to our research, Nova Measuring Instruments has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Nova Measuring Instruments Ltd.'s Growth Numbers
Over the past three years, Nova Measuring Instruments Ltd. has seen its earnings per share (EPS) grow by 10% per year. Its revenue is up 2.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Nova Measuring Instruments Ltd. Been A Good Investment?
We think that the total shareholder return of 95%, over three years, would leave most Nova Measuring Instruments Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As we noted earlier, Nova Measuring Instruments pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Eitan's performance.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Nova Measuring Instruments.
Switching gears from Nova Measuring Instruments, 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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