Shareholders May Find It Hard To Justify Increasing Oblong, Inc.'s (NASDAQ:OBLG) CEO Compensation For Now
Key Insights
Oblong to hold its Annual General Meeting on 4th of December
Total pay for CEO Pete Holst includes US$295.0k salary
The total compensation is similar to the average for the industry
Over the past three years, Oblong's EPS grew by 62% and over the past three years, the total loss to shareholders 100%
In the past three years, the share price of Oblong, Inc. (NASDAQ:OBLG) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 4th of December could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Oblong
Comparing Oblong, Inc.'s CEO Compensation With The Industry
According to our data, Oblong, Inc. has a market capitalization of US$3.1m, and paid its CEO total annual compensation worth US$451k over the year to December 2022. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at US$295.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the American Software industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$582k. This suggests that Oblong remunerates its CEO largely in line with the industry average.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$295k | US$246k | 65% |
Other | US$156k | US$209k | 35% |
Total Compensation | US$451k | US$455k | 100% |
Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. According to our research, Oblong has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Oblong, Inc.'s Growth
Oblong, Inc. has seen its earnings per share (EPS) increase by 62% a year over the past three years. Its revenue is down 29% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Oblong, Inc. Been A Good Investment?
Few Oblong, Inc. shareholders would feel satisfied with the return of -100% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 4 which are a bit concerning) in Oblong we think you should know about.
Switching gears from Oblong, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
