U.S. markets open in 3 hours 35 minutes
  • S&P Futures

    4,239.00
    +2.75 (+0.06%)
     
  • Dow Futures

    33,898.00
    +63.00 (+0.19%)
     
  • Nasdaq Futures

    14,264.50
    +6.25 (+0.04%)
     
  • Russell 2000 Futures

    2,292.20
    -0.30 (-0.01%)
     
  • Crude Oil

    73.53
    +0.68 (+0.93%)
     
  • Gold

    1,782.50
    +5.10 (+0.29%)
     
  • Silver

    26.01
    +0.15 (+0.59%)
     
  • EUR/USD

    1.1943
    0.0000 (-0.00%)
     
  • 10-Yr Bond

    1.4720
    0.0000 (0.00%)
     
  • Vix

    16.49
    -1.40 (-7.83%)
     
  • GBP/USD

    1.3956
    +0.0009 (+0.07%)
     
  • USD/JPY

    110.9340
    +0.2990 (+0.27%)
     
  • BTC-USD

    33,968.78
    +2,319.52 (+7.33%)
     
  • CMC Crypto 200

    812.49
    +18.17 (+2.29%)
     
  • FTSE 100

    7,095.10
    +5.09 (+0.07%)
     
  • Nikkei 225

    28,874.89
    -9.24 (-0.03%)
     

Shareholders May Be More Conservative With Verint Systems Inc.'s (NASDAQ:VRNT) CEO Compensation For Now

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

The share price of Verint Systems Inc. (NASDAQ:VRNT) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 17 June 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Verint Systems

Comparing Verint Systems Inc.'s CEO Compensation With the industry

Our data indicates that Verint Systems Inc. has a market capitalization of US$3.0b, and total annual CEO compensation was reported as US$9.2m for the year to January 2021. That's a notable decrease of 22% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$717k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.6m. Hence, we can conclude that Dan Bodner is remunerated higher than the industry median. What's more, Dan Bodner holds US$37m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2021

2020

Proportion (2021)

Salary

US$717k

US$755k

8%

Other

US$8.5m

US$11m

92%

Total Compensation

US$9.2m

US$12m

100%

On an industry level, roughly 11% of total compensation represents salary and 89% is other remuneration. Verint Systems pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Verint Systems Inc.'s Growth Numbers

Over the last three years, Verint Systems Inc. has shrunk its earnings per share by 60% per year. In the last year, its revenue is up 9.8%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Verint Systems Inc. Been A Good Investment?

Boasting a total shareholder return of 94% over three years, Verint Systems 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.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Verint Systems you should be aware of, and 1 of them makes us a bit uncomfortable.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.