Ofer Elyakim became the CEO of DSP Group, Inc. (NASDAQ:DSPG) in 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ofer Elyakim's Compensation Compare With Similar Sized Companies?
Our data indicates that DSP Group, Inc. is worth US$359m, and total annual CEO compensation was reported as US$1.4m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$330k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.
That means Ofer Elyakim receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at DSP Group has changed from year to year.
Is DSP Group, Inc. Growing?
Over the last three years DSP Group, Inc. has shrunk its earnings per share by an average of 89% per year (measured with a line of best fit). It saw its revenue drop 6.7% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has DSP Group, Inc. Been A Good Investment?
With a total shareholder return of 22% over three years, DSP Group, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Ofer Elyakim is paid around the same as most CEOs of similar size companies.
The company isn't growing earnings per share, and nor have the total returns inspired us. We wouldn't say the CEO pay is too high, but one might argue that the company should improve returns to shareholders before increasing it. So you may want to check if insiders are buying DSP Group 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.
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