Is Zix Corporation (NASDAQ:ZIXI) Overpaying Its CEO?
Dave Wagner became the CEO of Zix Corporation (NASDAQ:ZIXI) in 2016. 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. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Zix
How Does Dave Wagner's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Zix Corporation has a market cap of US$412m, and reported total annual CEO compensation of US$1.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$375k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.7m.
That means Dave Wagner receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Zix has changed from year to year.
Is Zix Corporation Growing?
Zix Corporation has reduced its earnings per share by an average of 43% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 106%.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Shareholders might be interested in this free visualization of analyst forecasts.
Has Zix Corporation Been A Good Investment?
I think that the total shareholder return of 56%, over three years, would leave most Zix Corporation shareholders smiling. 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.
In Summary...
Remuneration for Dave Wagner is close enough to the median pay for a CEO of a similar sized company .
While the growth could be better, the shareholder returns are clearly good. So we can conclude that on this analysis the CEO compensation seems pretty sound. Shareholders may want to check for free if Zix insiders are buying or selling shares.
If you want to buy a stock that is better than Zix, this free list of high return, low debt companies is a great place to look.
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.
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