Shareholders Would Not Be Objecting To Alkami Technology, Inc.'s (NASDAQ:ALKT) CEO Compensation And Here's Why

Key Insights

• Alkami Technology to hold its Annual General Meeting on 14th of May
• CEO Alex Shootman's total compensation includes salary of US$537.0k
• The total compensation is similar to the average for the industry
• Over the past three years, Alkami Technology's EPS grew by 15% and over the past three years, the total shareholder return was 168%

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It would be hard to discount the role that CEO Alex Shootman has played in delivering the impressive results at Alkami Technology, Inc. (NASDAQ:ALKT) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 14th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Alkami Technology

How Does Total Compensation For Alex Shootman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Alkami Technology, Inc. has a market capitalization of US$2.8b, and reported total annual CEO compensation of US$7.8m for the year to December 2024. That's a notable increase of 81% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$537k.

For comparison, other companies in the American Software industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$10m. From this we gather that Alex Shootman is paid around the median for CEOs in the industry. Moreover, Alex Shootman also holds US$14m worth of Alkami Technology stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. Alkami Technology pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Alkami Technology, Inc.'s Growth Numbers

Alkami Technology, Inc.'s earnings per share (EPS) grew 15% per year over the last three years. In the last year, its revenue is up 27%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Alkami Technology, Inc. Been A Good Investment?

We think that the total shareholder return of 168%, over three years, would leave most Alkami Technology, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Alkami Technology that investors should be aware of in a dynamic business environment.

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. 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.