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Ashu Roy has been the CEO of eGain Corporation (NASDAQ:EGAN) since 1997, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether eGain pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing eGain Corporation's CEO Compensation With the industry
According to our data, eGain Corporation has a market capitalization of US$349m, and paid its CEO total annual compensation worth US$287k over the year to June 2020. We note that's a decrease of 11% compared to last year. Notably, the salary which is US$250.0k, represents most of the total compensation being paid.
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$1.1m. This suggests that Ashu Roy is paid below the industry median. What's more, Ashu Roy holds US$97m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. According to our research, eGain has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at eGain Corporation's Growth Numbers
Over the past three years, eGain Corporation has seen its earnings per share (EPS) grow by 103% per year. It achieved revenue growth of 8.6% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has eGain Corporation Been A Good Investment?
We think that the total shareholder return of 140%, over three years, would leave most eGain Corporation shareholders smiling. 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.
As we noted earlier, eGain pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Ashu's performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for eGain that investors should be aware of in a dynamic business environment.
Important note: eGain is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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