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William Smith became the CEO of Smith Micro Software, Inc. (NASDAQ:SMSI) in 1982. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 process should give us an idea about how appropriately the CEO is paid.
How Does William Smith's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Smith Micro Software, Inc. has a market cap of US$99m, and is paying total annual CEO compensation of US$900k. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$475k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$471k.
Thus we can conclude that William Smith receives more in total compensation than the median of a group of companies in the same market, and of similar size to Smith Micro Software, 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, below, how CEO compensation at Smith Micro Software has changed over time.
Is Smith Micro Software, Inc. Growing?
On average over the last three years, Smith Micro Software, Inc. has grown earnings per share (EPS) by 46% each year (using a line of best fit). It achieved revenue growth of 28% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has Smith Micro Software, Inc. Been A Good Investment?
With a total shareholder return of 8.3% over three years, Smith Micro Software, Inc. has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Smith Micro Software, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Smith Micro Software shares (free trial).
If you want to buy a stock that is better than Smith Micro Software, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.