In 2004 Jeremy Stoppelman was appointed CEO of Yelp Inc. (NYSE:YELP). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jeremy Stoppelman's Compensation Compare With Similar Sized Companies?
According to our data, Yelp Inc. has a market capitalization of US$2.7b, and pays its CEO total annual compensation worth US$5.5m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.0. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.
So Jeremy Stoppelman is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Yelp, below.
Is Yelp Inc. Growing?
Yelp Inc. has increased its earnings per share (EPS) by an average of 89% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.1%.
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 Yelp Inc. Been A Good Investment?
Given the total loss of 7.3% over three years, many shareholders in Yelp Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Remuneration for Jeremy Stoppelman is close enough to the median pay for a CEO of a similar sized company .
We like that the company is growing EPS, but we find the returns over the last three years to be lacking. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Yelp.
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.
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