In 1993 Pehong Chen was appointed CEO of BroadVision, Inc. (NASDAQ:BVSN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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 Pehong Chen’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that BroadVision, Inc. has a market cap of US$15m, and reported total annual CEO compensation of US$352k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$350k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$520k.
Most shareholders would consider it a positive that Pehong Chen takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at BroadVision has changed over time.
Is BroadVision, Inc. Growing?
BroadVision, Inc. has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 1.2%.
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. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has BroadVision, Inc. Been A Good Investment?
Since shareholders would have lost about 46% over three years, some BroadVision, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
It appears that BroadVision, Inc. remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Pehong Chen is generously paid, it would be good to see an improvement in business performance before too an increase in pay. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. So you may want to check if insiders are buying BroadVision shares with their own money (free access).
If you want to buy a stock that is better than BroadVision, this free list of high return, low debt companies is a great place to look.
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