How Should Investors Feel About Coupa Software's (NASDAQ:COUP) CEO Remuneration?
This article will reflect on the compensation paid to Rob Bernshteyn who has served as CEO of Coupa Software Incorporated (NASDAQ:COUP) since 2009. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Coupa Software.
See our latest analysis for Coupa Software
How Does Total Compensation For Rob Bernshteyn Compare With Other Companies In The Industry?
Our data indicates that Coupa Software Incorporated has a market capitalization of US$20b, and total annual CEO compensation was reported as US$11m for the year to January 2020. We note that's an increase of 16% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$494k.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$9.7m. So it looks like Coupa Software compensates Rob Bernshteyn in line with the median for the industry. What's more, Rob Bernshteyn holds US$57m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$494k | US$425k | 5% |
Other | US$10m | US$8.7m | 95% |
Total Compensation | US$11m | US$9.1m | 100% |
On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. Coupa Software has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Coupa Software Incorporated's Growth
Over the last three years, Coupa Software Incorporated has shrunk its earnings per share by 24% per year. Its revenue is up 44% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Coupa Software Incorporated Been A Good Investment?
We think that the total shareholder return of 746%, over three years, would leave most Coupa Software Incorporated 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.
To Conclude...
Coupa Software prefers rewarding its CEO through non-salary benefits. As previously discussed, Rob is compensated close to the median for companies of its size, and which belong to the same industry. The company has logged solid shareholder returns for the past three years. At the same time, revenues are also moving northwards at a healthy pace. On a sour note, EPS growth has been negative. Considering overall performance, it's fair to say Rob is paid reasonably.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Coupa Software that investors should think about before committing capital to this stock.
Important note: Coupa Software 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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