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Does RADCOM Ltd.'s (NASDAQ:RDCM) CEO Pay Compare Well With Peers?

Simply Wall St

Yaron Ravkaie became the CEO of RADCOM Ltd. (NASDAQ:RDCM) in 2016. 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 process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for RADCOM

How Does Yaron Ravkaie's Compensation Compare With Similar Sized Companies?

Our data indicates that RADCOM Ltd. is worth US$121m, and total annual CEO compensation was reported as US$557k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$269k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$523k.

That means Yaron Ravkaie receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at RADCOM has changed over time.

NasdaqCM:RDCM CEO Compensation, December 24th 2019

Is RADCOM Ltd. Growing?

Over the last three years RADCOM Ltd. has shrunk its earnings per share by an average of 81% per year (measured with a line of best fit). It saw its revenue drop 31% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has RADCOM Ltd. Been A Good Investment?

Given the total loss of 52% over three years, many shareholders in RADCOM Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Yaron Ravkaie is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don't think the CEO is underpaid! Whatever your view on compensation, you might want to check if insiders are buying or selling RADCOM shares (free trial).

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.