In 2014 Bill Stone was appointed CEO of Digital Turbine, Inc. (NASDAQ:APPS). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Bill Stone's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Digital Turbine, Inc. has a market cap of US$627m, and reported total annual CEO compensation of US$981k for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$500k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.6m.
A first glance this seems like a real positive for shareholders, since Bill Stone is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Digital Turbine has changed over time.
Is Digital Turbine, Inc. Growing?
Digital Turbine, Inc. has increased its earnings per share (EPS) by an average of 52% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 35%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Digital Turbine, Inc. Been A Good Investment?
Boasting a total shareholder return of 971% over three years, Digital Turbine, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Digital Turbine, Inc. is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Bill Stone deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Digital Turbine shares with their own money (free access).
Important note: Digital Turbine 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 email@example.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.
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