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Why Radware Ltd.'s (NASDAQ:RDWR) CEO Pay Matters To You

Simply Wall St
·3 mins read

Roy Zisapel has been the CEO of Radware Ltd. (NASDAQ:RDWR) since 1996. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Radware

How Does Roy Zisapel's Compensation Compare With Similar Sized Companies?

According to our data, Radware Ltd. has a market capitalization of US$1.1b, and paid its CEO total annual compensation worth US$2.7m over the year to December 2019. That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$414k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$3.4m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Radware. On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. Readers will want to know that Radware pays a modest slice of remuneration through salary, as compared to the wider sector.

That means Roy Zisapel receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see a visual representation of the CEO compensation at Radware, below.

NasdaqGS:RDWR CEO Compensation May 19th 2020
NasdaqGS:RDWR CEO Compensation May 19th 2020

Is Radware Ltd. Growing?

Over the last three years Radware Ltd. has seen earnings per share (EPS) move in a positive direction by an average of 108% per year (using a line of best fit). It achieved revenue growth of 3.9% over the last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.

Has Radware Ltd. Been A Good Investment?

I think that the total shareholder return of 34%, over three years, would leave most Radware Ltd. shareholders smiling. 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.

In Summary...

Remuneration for Roy Zisapel is close enough to the median pay for a CEO of a similar sized company .

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Looking into other areas, we've picked out 1 warning sign for Radware that investors should think about before committing capital to this stock.

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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.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. 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. Thank you for reading.