Is Digimarc Corporation's (NASDAQ:DMRC) CEO Paid Enough Relative To Peers?
In 2008 Bruce Davis was appointed CEO of Digimarc Corporation (NASDAQ:DMRC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Digimarc
How Does Bruce Davis's Compensation Compare With Similar Sized Companies?
Our data indicates that Digimarc Corporation is worth US$529m, and total annual CEO compensation is US$2.2m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$747k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.8m.
So Bruce Davis is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Digimarc has changed from year to year.
Is Digimarc Corporation Growing?
Digimarc Corporation has reduced its earnings per share by an average of 8.0% a year, over the last three years (measured with a line of best fit). Its revenue is down -11% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Digimarc Corporation Been A Good Investment?
With a total shareholder return of 21% over three years, Digimarc Corporation shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Bruce Davis is paid around what is normal the leaders of comparable size companies.
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn't say the CEO pay is too high, but one might argue that the company should improve returns to shareholders before increasing it. Whatever your view on compensation, you might want to check if insiders are buying or selling Digimarc shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
