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What Can We Conclude About Casa Systems' (NASDAQ:CASA) CEO Pay?

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Simply Wall St
·4 min read
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This article will reflect on the compensation paid to Jerry Guo who has served as CEO of Casa Systems, Inc. (NASDAQ:CASA) since 2003. This analysis will also assess whether Casa Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Casa Systems

How Does Total Compensation For Jerry Guo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Casa Systems, Inc. has a market capitalization of US$552m, and reported total annual CEO compensation of US$5.7m for the year to December 2019. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$714k.

On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$809k. Accordingly, our analysis reveals that Casa Systems, Inc. pays Jerry Guo north of the industry median. What's more, Jerry Guo holds US$67m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$714k

US$758k

13%

Other

US$5.0m

US$4.8m

87%

Total Compensation

US$5.7m

US$5.5m

100%

On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. Casa Systems sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Casa Systems, Inc.'s Growth Numbers

Casa Systems, Inc. has reduced its earnings per share by 27% a year over the last three years. In the last year, its revenue is up 62%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Casa Systems, Inc. Been A Good Investment?

With a three year total loss of 63% for the shareholders, Casa Systems, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Casa Systems pays its CEO higher than the norm for similar-sized companies belonging to the same industry. At the same time, looking at EPS and total shareholder returns, it's tough to say Casa Systems is in a sound position, considering both metrics are down. On a more positive note, the company has produced a more positive revenue growth more recently. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Casa Systems (1 doesn't sit too well with us!) that you should be aware of before investing here.

Important note: Casa Systems is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.