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Should You Worry About RealNetworks, Inc.'s (NASDAQ:RNWK) CEO Pay?

Simply Wall St

Rob Glaser has been the CEO of RealNetworks, Inc. (NASDAQ:RNWK) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for RealNetworks

How Does Rob Glaser's Compensation Compare With Similar Sized Companies?

Our data indicates that RealNetworks, Inc. is worth US$101m, and total annual CEO compensation is US$1.6m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$450k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$434k.

Thus we can conclude that Rob Glaser receives more in total compensation than the median of a group of companies in the same market, and of similar size to RealNetworks, 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 RealNetworks has changed from year to year.

NasdaqGS:RNWK CEO Compensation, April 23rd 2019

Is RealNetworks, Inc. Growing?

Over the last three years RealNetworks, Inc. has grown its earnings per share (EPS) by an average of 56% per year (using a line of best fit). Its revenue is down -12% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has RealNetworks, Inc. Been A Good Investment?

With a three year total loss of 41%, RealNetworks, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount RealNetworks, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want to check for free if RealNetworks insiders are buying or selling shares.

If you want to buy a stock that is better than RealNetworks, this free list of high return, low debt companies is a great place to look.

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 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.