Robin Raina became the CEO of Ebix, Inc. (NASDAQ:EBIX) in 1999. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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.
How Does Robin Raina’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ebix, Inc. has a market cap of US$1.2b, and is paying total annual CEO compensation of US$4.4m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$2.4m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.
As you can see, Robin Raina is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ebix, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Ebix has changed from year to year.
Is Ebix, Inc. Growing?
Ebix, Inc. has increased its earnings per share (EPS) by an average of 4.2% a year, over the last three years (using a line of best fit). Its revenue is up 28% over last year.
It’s great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives!
Has Ebix, Inc. Been A Good Investment?
Since shareholders would have lost about 32% over three years, some Ebix, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Ebix, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. Shareholders may want to check for free if Ebix insiders are buying or selling shares.
Important note: Ebix may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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