Yahoo Finance Shareholders Will Probably Be Cautious Of Increasing Bloom Energy Corporation's (NYSE:BE) CEO Compensation At The Moment
Key Insights
Bloom Energy will host its Annual General Meeting on 7th of May
Salary of US$813.8k is part of CEO K. Sridhar's total remuneration
The total compensation is 78% less than the average for the industry
Over the past three years, Bloom Energy's EPS fell by 20% and over the past three years, the total loss to shareholders 52%
The disappointing performance at Bloom Energy Corporation (NYSE:BE) will make some shareholders rather disheartened. 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. From our analysis below, we think CEO compensation looks appropriate for now.
Check out our latest analysis for Bloom Energy
Comparing Bloom Energy Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Bloom Energy Corporation has a market capitalization of US$2.5b, and reported total annual CEO compensation of 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. This suggests that K. Sridhar is paid below 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. It's interesting to note that Bloom Energy pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Bloom Energy Corporation's Growth
Bloom Energy Corporation has reduced its earnings per share by 20% a year over the last three years. Its revenue is up 11% over the last year.
Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 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...
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, 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. That's why we did some digging and identified 2 warning signs for Bloom Energy that investors should think about before committing capital to this stock.
Switching gears from Bloom Energy, 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.
