In 1993 Pehong Chen was appointed CEO of BroadVision, Inc. (NASDAQ:BVSN). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Pehong Chen's Compensation Compare With Similar Sized Companies?
According to our data, BroadVision, Inc. has a market capitalization of US$16m, and paid its CEO total annual compensation worth US$352k over the year to December 2018. Notably, the salary of US$350k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$523k.
A first glance this seems like a real positive for shareholders, since Pehong Chen is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at BroadVision has changed over time.
Is BroadVision, Inc. Growing?
Over the last three years BroadVision, Inc. has grown its earnings per share (EPS) by an average of 29% per year (using a line of best fit). In the last year, its revenue is up 1.2%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has BroadVision, Inc. Been A Good Investment?
Given the total loss of 38% over three years, many shareholders in BroadVision, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that BroadVision, Inc. remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. We're not critical of the remuneration Pehong Chen receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at BroadVision.
Important note: BroadVision 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 firstname.lastname@example.org. 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.