Is Digital Turbine, Inc. (NASDAQ:APPS) Overpaying Its CEO?
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Bill Stone has been the CEO of Digital Turbine, Inc. (NASDAQ:APPS) since 1970. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Digital Turbine
How Does Bill Stone's Compensation Compare With Similar Sized Companies?
According to our data, Digital Turbine, Inc. has a market capitalization of US$310m, and pays its CEO total annual compensation worth US$967k. (This is based on the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$500k. 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.
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?
On average over the last three years, Digital Turbine, Inc. has grown earnings per share (EPS) by 49% each year (using a line of best fit). It achieved revenue growth of 292% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Digital Turbine, Inc. Been A Good Investment?
Boasting a total shareholder return of 258% over three years, Digital Turbine, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
It appears that Digital Turbine, Inc. remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Bill Stone deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Digital Turbine insiders are buying or selling shares.
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.
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.
