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Does CEVA, Inc.'s (NASDAQ:CEVA) CEO Pay Compare Well With Peers?

Simply Wall St

Gideon Wertheizer became the CEO of CEVA, Inc. (NASDAQ:CEVA) in 2005. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for CEVA

How Does Gideon Wertheizer's Compensation Compare With Similar Sized Companies?

Our data indicates that CEVA, Inc. is worth US$666m, and total annual CEO compensation was reported as US$1.6m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$456k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.5m.

Most shareholders would consider it a positive that Gideon Wertheizer takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at CEVA has changed from year to year.

NasdaqGS:CEVA CEO Compensation, February 13th 2020

Is CEVA, Inc. Growing?

Over the last three years CEVA, Inc. has shrunk its earnings per share by an average of 74% per year (measured with a line of best fit). Its revenue is up 2.8% over last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has CEVA, Inc. Been A Good Investment?

With a three year total loss of 14%, CEVA, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It looks like CEVA, Inc. pays its CEO less than similar sized companies.

The compensation paid to Gideon Wertheizer is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at CEVA.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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.