Performance at AeroVironment, Inc. (NASDAQ:AVAV) has been rather uninspiring recently and shareholders may be wondering how CEO Wahid Nawabi plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 23 September 2022. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for AeroVironment

Comparing AeroVironment, Inc.'s CEO Compensation With The Industry

Our data indicates that AeroVironment, Inc. has a market capitalization of US$2.3b, and total annual CEO compensation was reported as US$3.5m for the year to April 2022. We note that's an increase of 40% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$822k.

In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$5.4m. This suggests that Wahid Nawabi is paid below the industry median. Furthermore, Wahid Nawabi directly owns US$7.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. It's interesting to note that AeroVironment pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

AeroVironment, Inc.'s Growth

Over the last three years, AeroVironment, Inc. has shrunk its earnings per share by 67% per year. In the last year, its revenue is up 11%.

The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. 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 AeroVironment, Inc. Been A Good Investment?

Boasting a total shareholder return of 50% over three years, AeroVironment, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.