In 2009 Jeff Davis was appointed CEO of Perficient, Inc. (NASDAQ:PRFT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Jeff Davis’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Perficient, Inc. has a market cap of US$838m, and is paying total annual CEO compensation of US$3.8m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$597k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO compensation was US$2.2m.
Thus we can conclude that Jeff Davis receives more in total compensation than the median of a group of companies in the same market, and of similar size to Perficient, 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.
You can see a visual representation of the CEO compensation at Perficient, below.
Is Perficient, Inc. Growing?
On average over the last three years, Perficient, Inc. has shrunk earnings per share by 3.7% each year. Its revenue is up 4.3% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Perficient, Inc. Been A Good Investment?
Perficient, Inc. has served shareholders reasonably well, with a total return of 32% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Perficient, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. So you may want to check if insiders are buying Perficient shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.