Should Shareholders Reconsider Digital Turbine, Inc.'s (NASDAQ:APPS) CEO Compensation Package?

Key Insights

• Digital Turbine's Annual General Meeting to take place on 27th of August
• Total pay for CEO Bill Stone includes US$650.0k salary
• The overall pay is 269% above the industry average
• Over the past three years, Digital Turbine's EPS fell by 127% and over the past three years, the total loss to shareholders 92%

Shareholders will probably not be too impressed with the underwhelming results at Digital Turbine, Inc. (NASDAQ:APPS) recently. At the upcoming AGM on 27th of August, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Digital Turbine

How Does Total Compensation For Bill Stone Compare With Other Companies In The Industry?

Our data indicates that Digital Turbine, Inc. has a market capitalization of US$430m, and total annual CEO compensation was reported as US$6.8m for the year to March 2024. Notably, that's a decrease of 17% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$650k.

In comparison with other companies in the American Software industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.8m. Accordingly, our analysis reveals that Digital Turbine, Inc. pays Bill Stone north of the industry median. Furthermore, Bill Stone directly owns US$6.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$650k	US$625k	10%
Other	US$6.1m	US$7.6m	90%
Total Compensation	US$6.8m	US$8.2m	100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Digital Turbine sets aside a smaller share of compensation for salary, in comparison to the overall 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 Digital Turbine, Inc.'s Growth Numbers

Over the last three years, Digital Turbine, Inc. has shrunk its earnings per share by 127% per year. Its revenue is down 17% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Digital Turbine, Inc. Been A Good Investment?

With a total shareholder return of -92% over three years, Digital Turbine, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is concerning) in Digital Turbine we think you should know about.

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.