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In 2009 Eric Stang was appointed CEO of Ooma, Inc. (NYSE:OOMA). 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. 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 Eric Stang's Compensation Compare With Similar Sized Companies?
According to our data, Ooma, Inc. has a market capitalization of US$221m, and pays its CEO total annual compensation worth US$3.1m. (This figure is for the year to January 2019). We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$501k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.1m.
It would therefore appear that Ooma, Inc. pays Eric Stang more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Ooma, below.
Is Ooma, Inc. Growing?
Over the last three years Ooma, Inc. has grown its earnings per share (EPS) by an average of 6.2% per year (using a line of best fit). Its revenue is up 14% over last year.
I think the revenue growth is good. And the modest growth in earnings per share isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ooma, Inc. Been A Good Investment?
Ooma, Inc. has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at Ooma, 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.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. Considering this, we wouldn't want to see any big pay rises, although we'd stop short of calling the CEO compensation unfair. So you may want to check if insiders are buying Ooma shares with their own money (free access).
If you want to buy a stock that is better than Ooma, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.