Gideon Wertheizer has been the CEO of CEVA, Inc. (NASDAQ:CEVA) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Gideon Wertheizer Compare With Other Companies In The Industry?
At the time of writing, our data shows that CEVA, Inc. has a market capitalization of US$930m, and reported total annual CEO compensation of US$2.3m for the year to December 2019. That's a notable increase of 47% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$460k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.3m. This suggests that CEVA remunerates its CEO largely in line with the industry average. What's more, Gideon Wertheizer holds US$2.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. According to our research, CEVA has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at CEVA, Inc.'s Growth Numbers
Over the last three years, CEVA, Inc. has shrunk its earnings per share by 55% per year. In the last year, its revenue is up 27%.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has CEVA, Inc. Been A Good Investment?
Given the total shareholder loss of 7.0% over three years, many shareholders in CEVA, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Gideon is compensated close to the median for companies of its size, and which belong to the same industry. But revenue growth seems to be inching northward, a heartening sign for the company. In contrast, over the same time span, shareholder returns are negative. EPS growth is also negative, adding insult to injury. Overall, we wouldn't say CEO is highly paid, but shareholders might not go for a raise before business metrics start to improve precipitously.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for CEVA that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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