We Discuss Why Fiverr International Ltd.'s (NYSE:FVRR) CEO Compensation May Be Closely Reviewed

Key Insights

• Fiverr International to hold its Annual General Meeting on 25th of October
• Total pay for CEO Micha Kaufman includes US$300.0k salary
• Total compensation is 139% above industry average
• Over the past three years, Fiverr International's EPS fell by 30% and over the past three years, the total loss to shareholders 85%

Fiverr International Ltd. (NYSE:FVRR) has not performed well recently and CEO Micha Kaufman will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 25th of October. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Fiverr International

Comparing Fiverr International Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Fiverr International Ltd. has a market capitalization of US$914m, and reported total annual CEO compensation of US$9.6m for the year to December 2022. Notably, that's an increase of 34% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$300k.

For comparison, other companies in the American Professional Services industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$4.0m. This suggests that Micha Kaufman is paid more than the median for the industry. Moreover, Micha Kaufman also holds US$43m worth of Fiverr International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	US$300k	US$301k	3%
Other	US$9.3m	US$6.9m	97%
Total Compensation	US$9.6m	US$7.2m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Fiverr International has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Fiverr International Ltd.'s Growth

Fiverr International Ltd. has reduced its earnings per share by 30% a year over the last three years. In the last year, its revenue is up 5.3%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Fiverr International Ltd. Been A Good Investment?

The return of -85% over three years would not have pleased Fiverr International Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Fiverr International prefers rewarding its CEO through non-salary benefits. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Fiverr International that investors should think about before committing capital to this stock.

Switching gears from Fiverr International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.