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

Simply Wall St
·3 min read

Zee Hakimoglu became the CEO of ClearOne, Inc. (NASDAQ:CLRO) in 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for ClearOne

How Does Zee Hakimoglu's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that ClearOne, Inc. has a market cap of US$27m, and reported total annual CEO compensation of US$355k for the year to December 2018. Notably, the salary of US$355k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$602k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 27% of total compensation out of all the companies we analysed, while other remuneration made up 73% of the pie. It's interesting to note that ClearOne pays out a greater portion of remuneration through salary, in comparison to the wider industry.

At first glance this seems like a real positive for shareholders, since Zee Hakimoglu 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 ClearOne has changed over time.

NasdaqCM:CLRO CEO Compensation March 31st 2020
NasdaqCM:CLRO CEO Compensation March 31st 2020

Is ClearOne, Inc. Growing?

ClearOne, Inc. has reduced its earnings per share by an average of 53% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 14% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has ClearOne, Inc. Been A Good Investment?

Given the total loss of 83% over three years, many shareholders in ClearOne, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

ClearOne, Inc. is currently paying its CEO below what is normal for companies of its size.

Zee Hakimoglu is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Taking a breather from CEO compensation, we've spotted 5 warning signs for ClearOne (of which 3 are potentially serious!) you should know about in order to have a holistic understanding of the stock.

If you want to buy a stock that is better than ClearOne, this free list of high return, low debt companies is a great place to look.

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.