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Bob Lento became the CEO of Limelight Networks, Inc. (NASDAQ:LLNW) in 2012. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bob Lento's Compensation Compare With Similar Sized Companies?
According to our data, Limelight Networks, Inc. has a market capitalization of US$344m, and pays its CEO total annual compensation worth US$3.2m. (This figure is for the year to December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$480k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.
It would therefore appear that Limelight Networks, Inc. pays Bob Lento more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Limelight Networks has changed from year to year.
Is Limelight Networks, Inc. Growing?
On average over the last three years, Limelight Networks, Inc. has grown earnings per share (EPS) by 97% each year (using a line of best fit). It saw its revenue drop -2.6% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Limelight Networks, Inc. Been A Good Investment?
Boasting a total shareholder return of 114% over three years, Limelight Networks, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared total CEO remuneration at Limelight Networks, Inc. with the amount paid at companies with a similar market capitalization. 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. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Limelight Networks (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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 firstname.lastname@example.org. 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.