Should You Worry About 8×8, Inc.’s (NYSE:EGHT) CEO Pay Cheque?

In 2013 Vik Verma was appointed CEO of 8×8, Inc. (NYSE:EGHT). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for 8×8

How Does Vik Verma’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that 8×8, Inc. has a market cap of US$2.1b, and reported total annual CEO compensation of US$5.1m for the year to March 2019. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$490k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.

So Vik Verma receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at 8×8 has changed over time.

NYSE:EGHT CEO Compensation, October 1st 2019
NYSE:EGHT CEO Compensation, October 1st 2019

Is 8×8, Inc. Growing?

Over the last three years 8×8, Inc. has shrunk its earnings per share by an average of 77% per year (measured with a line of best fit). It achieved revenue growth of 18% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has 8×8, Inc. Been A Good Investment?

Boasting a total shareholder return of 34% over three years, 8×8, Inc. has done well by shareholders. 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…

Vik Verma is paid around the same as most CEOs of similar size companies.

The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we doubt many are complaining about the fairly normal CEO pay. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling 8×8 (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.