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Is ChannelAdvisor Corporation's (NYSE:ECOM) CEO Paid At A Competitive Rate?

Simply Wall St

David Spitz has been the CEO of ChannelAdvisor Corporation (NYSE:ECOM) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for ChannelAdvisor

How Does David Spitz's Compensation Compare With Similar Sized Companies?

Our data indicates that ChannelAdvisor Corporation is worth US$256m, and total annual CEO compensation was reported as US$1.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$411k. 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$100m to US$400m, and the median CEO total compensation was US$1.1m.

It would therefore appear that ChannelAdvisor Corporation pays David Spitz 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 ChannelAdvisor, below.

NYSE:ECOM CEO Compensation, December 6th 2019

Is ChannelAdvisor Corporation Growing?

Over the last three years ChannelAdvisor Corporation has grown its earnings per share (EPS) by an average of 31% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.

Has ChannelAdvisor Corporation Been A Good Investment?

Since shareholders would have lost about 40% over three years, some ChannelAdvisor Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by ChannelAdvisor Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ChannelAdvisor (free visualization of insider trades).

Important note: ChannelAdvisor may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.