In 2012 Rob Glaser was appointed CEO of RealNetworks, Inc. (NASDAQ:RNWK). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rob Glaser's Compensation Compare With Similar Sized Companies?
Our data indicates that RealNetworks, Inc. is worth US$50m, and total annual CEO compensation was reported as US$1.1m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$525k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$529k.
It would therefore appear that RealNetworks, Inc. pays Rob Glaser more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at RealNetworks has changed from year to year.
Is RealNetworks, Inc. Growing?
Over the last three years RealNetworks, Inc. has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). In the last year, its revenue is up 102%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has RealNetworks, Inc. Been A Good Investment?
With a three year total loss of 73%, RealNetworks, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at RealNetworks, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying RealNetworks shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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