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Does IDT's (NYSE:IDT) CEO Salary Compare Well With The Performance Of The Company?

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Simply Wall St
·3 min read
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Shmuel Jonas has been the CEO of IDT Corporation (NYSE:IDT) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether IDT pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for IDT

How Does Total Compensation For Shmuel Jonas Compare With Other Companies In The Industry?

At the time of writing, our data shows that IDT Corporation has a market capitalization of US$339m, and reported total annual CEO compensation of US$940k for the year to July 2020. Notably, that's a decrease of 40% over the year before. In particular, the salary of US$495.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.9m. In other words, IDT pays its CEO lower than the industry median. Moreover, Shmuel Jonas also holds US$3.4m worth of IDT stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$495k

US$495k

53%

Other

US$445k

US$1.1m

47%

Total Compensation

US$940k

US$1.6m

100%

On an industry level, around 28% of total compensation represents salary and 72% is other remuneration. IDT is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at IDT Corporation's Growth Numbers

Over the past three years, IDT Corporation has seen its earnings per share (EPS) grow by 123% per year. Its revenue is down 2.7% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has IDT Corporation Been A Good Investment?

Most shareholders would probably be pleased with IDT Corporation for providing a total return of 55% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, Shmuel is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Considering robust EPS growth, we believe Shmuel to be modestly paid. Given the strong history of shareholder returns, the shareholders are probably very happy with Shmuel's performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for IDT (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.