Key Insights

• Advanced Energy Industries' Annual General Meeting to take place on 25th of April
• Salary of US$947.9k is part of CEO Steve Kelley's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Advanced Energy Industries' EPS fell by 0.2% and over the past three years, the total loss to shareholders 18%

Advanced Energy Industries, Inc. (NASDAQ:AEIS) has not performed well recently and CEO Steve Kelley will probably need to up their game. At the upcoming AGM on 25th of April, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Comparing Advanced Energy Industries, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Advanced Energy Industries, Inc. has a market capitalization of US$3.4b, and reported total annual CEO compensation of US$8.3m for the year to December 2023. We note that's an increase of 11% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$948k.

On examining similar-sized companies in the American Electronic 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$8.3m. From this we gather that Steve Kelley is paid around the median for CEOs in the industry. Moreover, Steve Kelley also holds US$4.7m worth of Advanced Energy Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 34% of total compensation represents salary, while the remainder of 66% is other remuneration. In Advanced Energy Industries' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Advanced Energy Industries, Inc.'s Growth

Over the last three years, Advanced Energy Industries, Inc. has not seen its earnings per share change much, though they have deteriorated slightly. In the last year, its revenue is down 10%.

The lack of EPS growth is certainly uninspiring. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Advanced Energy Industries, Inc. Been A Good Investment?

With a three year total loss of 18% for the shareholders, Advanced Energy Industries, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

Whatever your view on compensation, you might want to check if insiders are buying or selling Advanced Energy Industries shares (free trial).

Important note: Advanced Energy Industries 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.