Frank Gibeau has been the CEO of Zynga Inc. (NASDAQ:ZNGA) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Frank Gibeau's Compensation Compare With Similar Sized Companies?
According to our data, Zynga Inc. has a market capitalization of US$5.2b, and pays its CEO total annual compensation worth US$9.9m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.
Thus we can conclude that Frank Gibeau receives more in total compensation than the median of a group of companies in the same market, and of similar size to Zynga Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Zynga has changed from year to year.
Is Zynga Inc. Growing?
Over the last three years Zynga Inc. has grown its earnings per share (EPS) by an average of 19% per year (using a line of best fit). In the last year, its revenue is up 19%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Zynga Inc. Been A Good Investment?
Most shareholders would probably be pleased with Zynga Inc. for providing a total return of 102% over three years. 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 Zynga 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.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Zynga shares (free trial).
If you want to buy a stock that is better than Zynga, this free list of high return, low debt companies is a great place to look.
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