Key Insights

• Data I/O to hold its Annual General Meeting on 16th of May
• Total pay for CEO Anthony Ambrose includes US$338.5k salary
• Total compensation is 63% above industry average
• Over the past three years, Data I/O's EPS grew by 85% and over the past three years, the total loss to shareholders 42%

The underwhelming share price performance of Data I/O Corporation (NASDAQ:DAIO) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 16th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Comparing Data I/O Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Data I/O Corporation has a market capitalization of US$28m, and reported total annual CEO compensation of US$775k for the year to December 2023. We note that's an increase of 22% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$339k.

For comparison, other companies in the American Electronic industry with market capitalizations below US$200m, reported a median total CEO compensation of US$475k. This suggests that Anthony Ambrose is paid more than the median for the industry. What's more, Anthony Ambrose holds US$954k worth of shares in the company in their own name.

On an industry level, around 31% of total compensation represents salary and 69% is other remuneration. Data I/O pays out 44% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Data I/O Corporation's Growth

Data I/O Corporation has seen its earnings per share (EPS) increase by 85% a year over the past three years. In the last year, its revenue is up 1.7%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Data I/O Corporation Been A Good Investment?

The return of -42% over three years would not have pleased Data I/O Corporation shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 Data I/O that you should be aware of before investing.

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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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.