A. Hass became the CEO of Rosetta Stone Inc. (NYSE:RST) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does A. Hass's Compensation Compare With Similar Sized Companies?
Our data indicates that Rosetta Stone Inc. is worth US$545m, and total annual CEO compensation is US$2.7m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$160k. 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$1.5m.
Thus we can conclude that A. Hass receives more in total compensation than the median of a group of companies in the same market, and of similar size to Rosetta Stone Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Rosetta Stone, below.
Is Rosetta Stone Inc. Growing?
Over the last three years Rosetta Stone Inc. has grown its earnings per share (EPS) by an average of 52% per year (using a line of best fit). In the last year, its revenue is down -5.9%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has Rosetta Stone Inc. Been A Good Investment?
Boasting a total shareholder return of 193% over three years, Rosetta Stone Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Rosetta Stone Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Rosetta Stone shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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