This article will reflect on the compensation paid to Ofer Elyakim who has served as CEO of DSP Group, Inc. (NASDAQ:DSPG) since 2009. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Ofer Elyakim Compare With Other Companies In The Industry?
Our data indicates that DSP Group, Inc. has a market capitalization of US$381m, and total annual CEO compensation was reported as US$1.9m for the year to December 2019. We note that's an increase of 38% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$330k.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.8m. So it looks like DSP Group compensates Ofer Elyakim in line with the median for the industry. Moreover, Ofer Elyakim also holds US$8.1m worth of DSP Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. DSP Group pays out 17% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
DSP Group, Inc.'s Growth
Over the last three years, DSP Group, Inc. has shrunk its earnings per share by 23% per year. It saw its revenue drop 2.3% over the last year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has DSP Group, Inc. Been A Good Investment?
With a total shareholder return of 27% over three years, DSP Group, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, DSP Group, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. DSP Group has had a poor showing when it comes to EPS growth, and it's tough to say that shareholder returns have done much to excite us. This doesn't compare well with CEO compensation, which is close to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for DSP Group that investors should think about before committing capital to this stock.
Switching gears from DSP Group, 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.
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.
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