Jack Abuhoff became the CEO of Innodata Inc. (NASDAQ:INOD) in 1997. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jack Abuhoff's Compensation Compare With Similar Sized Companies?
According to our data, Innodata Inc. has a market capitalization of US$27m, and paid its CEO total annual compensation worth US$1.0m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$500k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$585k.
Thus we can conclude that Jack Abuhoff receives more in total compensation than the median of a group of companies in the same market, and of similar size to Innodata Inc.. However, this doesn't necessarily mean the pay 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.
You can see, below, how CEO compensation at Innodata has changed over time.
Is Innodata Inc. Growing?
On average over the last three years, Innodata Inc. has grown earnings per share (EPS) by 67% each year (using a line of best fit). It saw its revenue drop 2.7% over the last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Innodata Inc. Been A Good Investment?
Since shareholders would have lost about 45% over three years, some Innodata Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Innodata Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Moving away from CEO compensation for the moment, we've identified 2 warning signs for Innodata that you should be aware of before investing.
Important note: Innodata may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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