What We Learned About Glu Mobile's (NASDAQ:GLUU) CEO Pay
Nick Earl has been the CEO of Glu Mobile Inc. (NASDAQ:GLUU) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Glu Mobile
Comparing Glu Mobile Inc.'s CEO Compensation With the industry
According to our data, Glu Mobile Inc. has a market capitalization of US$1.6b, and paid its CEO total annual compensation worth US$7.1m over the year to December 2019. Notably, that's a decrease of 23% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$475k.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$7.1m. This suggests that Glu Mobile remunerates its CEO largely in line with the industry average. Moreover, Nick Earl also holds US$5.0m worth of Glu Mobile stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$475k | US$456k | 7% |
Other | US$6.7m | US$8.9m | 93% |
Total Compensation | US$7.1m | US$9.3m | 100% |
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. In Glu Mobile's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Glu Mobile Inc.'s Growth Numbers
Glu Mobile Inc. has seen its earnings per share (EPS) increase by 94% a year over the past three years. In the last year, its revenue is up 11%.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Glu Mobile Inc. Been A Good Investment?
We think that the total shareholder return of 244%, over three years, would leave most Glu Mobile 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.
In Summary...
As we noted earlier, Glu Mobile pays its CEO in line with similar-sized companies belonging to the same industry. Few would be critical of the leadership, since returns have been juicy and earnings are moving in the right direction. Indeed, many might consider that Nick is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Glu Mobile that you should be aware of before investing.
Switching gears from Glu Mobile, 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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