Does Cornerstone OnDemand, Inc.'s (NASDAQ:CSOD) CEO Pay Compare Well With Peers?
Adam Miller has been the CEO of Cornerstone OnDemand, Inc. (NASDAQ:CSOD) since 1999. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Cornerstone OnDemand
How Does Adam Miller's Compensation Compare With Similar Sized Companies?
According to our data, Cornerstone OnDemand, Inc. has a market capitalization of US$3.6b, and paid its CEO total annual compensation worth US$6.6m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$500k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.
As you can see, Adam Miller is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Cornerstone OnDemand, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Cornerstone OnDemand has changed from year to year.
Is Cornerstone OnDemand, Inc. Growing?
Over the last three years Cornerstone OnDemand, Inc. has grown its earnings per share (EPS) by an average of 42% per year (using a line of best fit). It achieved revenue growth of 6.3% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Cornerstone OnDemand, Inc. Been A Good Investment?
Boasting a total shareholder return of 39% over three years, Cornerstone OnDemand, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared total CEO remuneration at Cornerstone OnDemand, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Cornerstone OnDemand.
If you want to buy a stock that is better than Cornerstone OnDemand, 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.
