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Rich Howe has been the CEO of Inuvo, Inc. (NYSEMKT:INUV) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Inuvo.
Comparing Inuvo, Inc.'s CEO Compensation With the industry
According to our data, Inuvo, Inc. has a market capitalization of US$39m, and paid its CEO total annual compensation worth US$505k over the year to December 2019. That's a notable decrease of 33% on last year. In particular, the salary of US$379.1k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$505k. So it looks like Inuvo compensates Rich Howe in line with the median for the industry. Moreover, Rich Howe also holds US$755k worth of Inuvo stock directly under their own name.
Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. Inuvo pays out 75% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Inuvo, Inc.'s Growth Numbers
Earnings per share at Inuvo, Inc. are much the same as they were three years ago, albeit slightly lower. Its revenue is down 14% over the previous year.
A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Inuvo, Inc. Been A Good Investment?
Since shareholders would have lost about 51% over three years, some Inuvo, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Inuvo, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Inuvo (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
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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