Vlad Shmunis became the CEO of RingCentral, Inc. (NYSE:RNG) in 1999. This analysis aims first to contrast CEO compensation with other large 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Vlad Shmunis’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that RingCentral, Inc. has a market cap of US$11b, and is paying total annual CEO compensation of US$7.9m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$544k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Most shareholders would consider it a positive that Vlad Shmunis takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at RingCentral, below.
Is RingCentral, Inc. Growing?
RingCentral, Inc. has reduced its earnings per share by an average of 7.8% a year, over the last three years (measured with a line of best fit). Its revenue is up 34% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. 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.
Has RingCentral, Inc. Been A Good Investment?
I think that the total shareholder return of 466%, over three years, would leave most RingCentral, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
RingCentral, Inc. is currently paying its CEO below what is normal for large companies.
Vlad Shmunis is paid less than what is normal at large companies, and the total shareholder return has been pleasing over the last three years. Although we could see higher growth, we’d argue the remuneration is modest, based on these observations. Shareholders may want to check for free if RingCentral insiders are buying or selling shares.
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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