Key Insights

• Cognex to hold its Annual General Meeting on 1st of May
• Total pay for CEO Rob Willett includes US$676.0k salary
• The total compensation is similar to the average for the industry
• Over the past three years, Cognex's EPS fell by 13% and over the past three years, the total loss to shareholders 54%

Cognex Corporation (NASDAQ:CGNX) has not performed well recently and CEO Rob Willett will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 1st of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Cognex

Comparing Cognex Corporation's CEO Compensation With The Industry

Our data indicates that Cognex Corporation has a market capitalization of US$6.8b, and total annual CEO compensation was reported as US$7.0m for the year to December 2023. We note that's a small decrease of 4.1% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$676k.

For comparison, other companies in the American Electronic industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.1m. From this we gather that Rob Willett is paid around the median for CEOs in the industry. What's more, Rob Willett holds US$625k worth of shares in the company in their own name.

Speaking on an industry level, nearly 36% of total compensation represents salary, while the remainder of 64% is other remuneration. Cognex sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Cognex Corporation's Growth

Over the last three years, Cognex Corporation has shrunk its earnings per share by 13% per year. In the last year, its revenue is down 17%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last 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 Cognex Corporation Been A Good Investment?

The return of -54% over three years would not have pleased Cognex Corporation shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Cognex that you should be aware of before investing.

Switching gears from Cognex, 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.

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.