Bloom Energy's Annual General Meeting to take place on 7th of May
Salary of US$813.8k is part of CEO K. Sridhar's total remuneration
Total compensation is 78% below industry average
Bloom Energy's EPS declined by 20% over the past three years while total shareholder loss over the past three years was 52%
Performance at Bloom Energy Corporation (NYSE:BE) has not been particularly rosy recently and shareholders will likely be holding CEO K. Sridhar and the board accountable for this. The next AGM coming up on 7th of May will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.
How Does Total Compensation For K. Sridhar Compare With Other Companies In The Industry?
Our data indicates that Bloom Energy Corporation has a market capitalization of US$2.5b, and total annual CEO compensation was reported as US$1.7m for the year to December 2023. Notably, that's a decrease of 35% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$814k.
On examining similar-sized companies in the American Electrical industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$7.9m. Accordingly, Bloom Energy pays its CEO under the industry median. Moreover, K. Sridhar also holds US$42m worth of Bloom Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component
2023
2022
Proportion (2023)
Salary
US$814k
US$762k
48%
Other
US$890k
US$1.9m
52%
Total Compensation
US$1.7m
US$2.6m
100%
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. According to our research, Bloom Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
NYSE:BE CEO Compensation May 1st 2024
A Look at Bloom Energy Corporation's Growth Numbers
Over the last three years, Bloom Energy Corporation has shrunk its earnings per share by 20% per year. In the last year, its revenue is up 11%.
The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Bloom Energy Corporation Been A Good Investment?
Few Bloom Energy Corporation shareholders would feel satisfied with the return of -52% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
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, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Bloom Energy that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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