In 2014 Homi Shamir was appointed CEO of Luminex Corporation (NASDAQ:LMNX). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Homi Shamir's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Luminex Corporation has a market cap of US$901m, and reported total annual CEO compensation of US$3.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$714k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.
It would therefore appear that Luminex Corporation pays Homi Shamir more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Luminex, below.
Is Luminex Corporation Growing?
Luminex Corporation has reduced its earnings per share by an average of 35% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1.4% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Luminex Corporation Been A Good Investment?
Given the total loss of 11% over three years, many shareholders in Luminex Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Luminex Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Luminex shares (free trial).
If you want to buy a stock that is better than Luminex, this free list of high return, low debt companies is a great place to look.
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