In 1997 Ashu Roy was appointed CEO of eGain Corporation (NASDAQ:EGAN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Ashu Roy's Compensation Compare With Similar Sized Companies?
According to our data, eGain Corporation has a market capitalization of US$223m, and paid its CEO total annual compensation worth US$321k over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$250k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.
A first glance this seems like a real positive for shareholders, since Ashu Roy is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at eGain has changed over time.
Is eGain Corporation Growing?
On average over the last three years, eGain Corporation has grown earnings per share (EPS) by 102% each year (using a line of best fit). In the last year, its revenue is up 10%.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has eGain Corporation Been A Good Investment?
Most shareholders would probably be pleased with eGain Corporation for providing a total return of 225% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that eGain Corporation remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Ashu Roy deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling eGain (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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