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This article will reflect on the compensation paid to Howard Lerman who has served as CEO of Yext, Inc. (NYSE:YEXT) since 2006. 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 Howard Lerman Compare With Other Companies In The Industry?
At the time of writing, our data shows that Yext, Inc. has a market capitalization of US$2.3b, and reported total annual CEO compensation of US$5.1m for the year to January 2020. We note that's an increase of 36% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$5.1m. So it looks like Yext compensates Howard Lerman in line with the median for the industry. Moreover, Howard Lerman also holds US$71m worth of Yext stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. It's interesting to note that Yext allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Yext, Inc.'s Growth
Yext, Inc. has reduced its earnings per share by 4.9% a year over the last three years. Its revenue is up 26% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Yext, Inc. Been A Good Investment?
We think that the total shareholder return of 52%, over three years, would leave most Yext, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As previously discussed, Howard is compensated close to the median for companies of its size, and which belong to the same industry. The company has logged solid shareholder returns for the past three years. Meanwhile, revenues have been increasing recently On a sour note, EPS growth has been negative. However, considering overall positive performance, we think Howard, shareholders might not be too worried about the CEO's compensation.
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. We've identified 3 warning signs for Yext that investors should be aware of in a dynamic business environment.
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.
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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