Yaki Faitelson became the CEO of Varonis Systems, Inc. (NASDAQ:VRNS) in 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Yaki Faitelson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Varonis Systems, Inc. has a market cap of US$1.9b, and reported total annual CEO compensation of US$8.8m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$560k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
Thus we can conclude that Yaki Faitelson receives more in total compensation than the median of a group of companies in the same market, and of similar size to Varonis Systems, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Varonis Systems has changed from year to year.
Is Varonis Systems, Inc. Growing?
On average over the last three years, Varonis Systems, Inc. has shrunk earnings per share by 29% each year (measured with a line of best fit). Its revenue is up 12% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Varonis Systems, Inc. Been A Good Investment?
I think that the total shareholder return of 112%, over three years, would leave most Varonis Systems, Inc. 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.
We examined the amount Varonis Systems, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. On the other hand, returns have been good, so the company is doing something right. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Varonis Systems (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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