Dave Wagner became the CEO of Zix Corporation (NASDAQ:ZIXI) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Zix.
How Does Total Compensation For Dave Wagner Compare With Other Companies In The Industry?
Our data indicates that Zix Corporation has a market capitalization of US$406m, and total annual CEO compensation was reported as US$2.4m for the year to December 2019. That's a notable increase of 67% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$400k.
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$1.0m. Accordingly, our analysis reveals that Zix Corporation pays Dave Wagner north of the industry median. Furthermore, Dave Wagner directly owns US$6.4m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. It's interesting to note that Zix pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Zix Corporation's Growth
Over the last three years, Zix Corporation has shrunk its earnings per share by 58% per year. Its revenue is up 49% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Zix Corporation Been A Good Investment?
Boasting a total shareholder return of 62% over three years, Zix Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Zix Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But shareholder returns and revenue growth have been very healthy as we saw before. Sadly, EPS growth did not follow suit, remaining during this time. Considering all the factors, we would have to say CEO pay is fair; however, moving forward, it would be nice to see EPS growth from the company as well.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Zix we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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