A. Hass has been the CEO of Rosetta Stone Inc (NYSE:RST) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. 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 A. Hass’s Compensation Compare With Similar Sized Companies?
Our data indicates that Rosetta Stone Inc is worth US$426m, and total annual CEO compensation is US$2m. That’s a modest increase of 3.9% on the prior year year. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO compensation was US$2m.
It would therefore appear that Rosetta Stone Inc pays A. Hass 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Rosetta Stone has changed over time.
Is Rosetta Stone Inc Growing?
On average over the last three years, Rosetta Stone Inc has grown earnings per share (EPS) by 66% each year. Its revenue is down -9.2% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Rosetta Stone Inc Been A Good Investment?
I think that the total shareholder return of 133%, over three years, would leave most Rosetta Stone Inc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Rosetta Stone Inc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Rosetta Stone Inc shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.