Most Shareholders Will Probably Agree With Alarm.com Holdings, Inc.'s (NASDAQ:ALRM) CEO Compensation

Key Insights

• Alarm.com Holdings to hold its Annual General Meeting on 4th of June
• Salary of US$238.3k is part of CEO Steve Trundle's total remuneration
• The overall pay is 71% below the industry average
• Alarm.com Holdings' EPS grew by 41% over the past three years while total shareholder loss over the past three years was 10.0%

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The performance at Alarm.com Holdings, Inc. (NASDAQ:ALRM) has been rather lacklustre of late and shareholders may be wondering what CEO Steve Trundle is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 4th of June. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Alarm.com Holdings

How Does Total Compensation For Steve Trundle Compare With Other Companies In The Industry?

Our data indicates that Alarm.com Holdings, Inc. has a market capitalization of US$2.9b, and total annual CEO compensation was reported as US$3.0m for the year to December 2024. That's a notable increase of 24% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$238k.

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. This suggests that Steve Trundle is paid below the industry median. Moreover, Steve Trundle also holds US$100m worth of Alarm.com Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 10% of total compensation represents salary, while the remainder of 90% is other remuneration. It's interesting to note that Alarm.com Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Alarm.com Holdings, Inc.'s Growth Numbers

Alarm.com Holdings, Inc.'s earnings per share (EPS) grew 41% per year over the last three years. Its revenue is up 6.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Alarm.com Holdings, Inc. Been A Good Investment?

With a three year total loss of 10.0% for the shareholders, Alarm.com Holdings, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The lacklustre share price returns is rather divergent to the robust growth in EPS, suggesting that there may be other factors weighing on it apart from fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Alarm.com Holdings that investors should be aware of in a dynamic business environment.

Important note: Alarm.com Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.