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Vlad Shmunis has been the CEO of RingCentral, Inc. (NYSE:RNG) since 1999. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Vlad Shmunis’s Compensation Compare With Similar Sized Companies?
Our data indicates that RingCentral, Inc. is worth US$8.5b, and total annual CEO compensation is US$5.6m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$525k. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$6.4m.
That means Vlad Shmunis receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at RingCentral has changed from year to year.
Is RingCentral, Inc. Growing?
RingCentral, Inc. has increased its earnings per share (EPS) by an average of 2.4% a year, over the last three years (using a line of best fit). It achieved revenue growth of 34% over the last year.
It’s hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Shareholders might be interested in this free visualization of analyst forecasts.
Has RingCentral, Inc. Been A Good Investment?
Boasting a total shareholder return of 486% over three years, RingCentral, Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Vlad Shmunis is close enough to the median pay for a CEO of a similar sized company .
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So all things considered I’d venture that the CEO pay is appropriate. So you may want to check if insiders are buying RingCentral shares with their own money (free access).
If you want to buy a stock that is better than RingCentral, this free list of high return, low debt companies is a great place to look.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.