Here's What We Think About Innodata's (NASDAQ:INOD) CEO Pay
Jack Abuhoff has been the CEO of Innodata Inc. (NASDAQ:INOD) 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 Innodata pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Innodata
Comparing Innodata Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Innodata Inc. has a market capitalization of US$100m, and reported total annual CEO compensation of US$735k for the year to December 2019. We note that's a decrease of 28% compared to last year. Notably, the salary which is US$500.0k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$388k. Accordingly, our analysis reveals that Innodata Inc. pays Jack Abuhoff north of the industry median. What's more, Jack Abuhoff holds US$4.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$500k | US$500k | 68% |
Other | US$235k | US$524k | 32% |
Total Compensation | US$735k | US$1.0m | 100% |
Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Innodata pays out 68% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Innodata Inc.'s Growth
Innodata Inc. has seen its earnings per share (EPS) increase by 57% a year over the past three years. In the last year, its revenue is up 2.6%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Innodata Inc. Been A Good Investment?
Most shareholders would probably be pleased with Innodata Inc. for providing a total return of 256% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we noted earlier, Innodata pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Jack deserves a raise!
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 2 warning signs for Innodata that investors should be aware of in a dynamic business environment.
Switching gears from Innodata, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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