How Should Investors Feel About Boku's (LON:BOKU) CEO Remuneration?

Jon Prideaux became the CEO of Boku, Inc. (LON:BOKU) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Boku

Comparing Boku, Inc.'s CEO Compensation With the industry

According to our data, Boku, Inc. has a market capitalization of UK£358m, and paid its CEO total annual compensation worth UK£400k over the year to December 2019. We note that's a decrease of 8.7% compared to last year. We note that the salary portion, which stands at US$300.9k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from UK£150m to UK£599m, we found that the median CEO total compensation was UK£529k. So it looks like Boku compensates Jon Prideaux in line with the median for the industry. What's more, Jon Prideaux holds UK£3.3m 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, roughly 69% of total compensation represents salary and 31% is other remuneration. Boku is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Boku, Inc.'s Growth Numbers

Boku, Inc. has seen its earnings per share (EPS) increase by 90% a year over the past three years. In the last year, its revenue is up 22%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Boku, Inc. Been A Good Investment?

Boasting a total shareholder return of 66% over three years, Boku, 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.

To Conclude...

As we touched on above, Boku, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Indeed, many might consider that Jon is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Boku (1 is potentially serious!) that you should be aware of before investing here.

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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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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