Shareholders of Bridgeline Digital, Inc. (NASDAQ:BLIN) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 19 August 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
How Does Total Compensation For Ari Kahn Compare With Other Companies In The Industry?
According to our data, Bridgeline Digital, Inc. has a market capitalization of US$33m, and paid its CEO total annual compensation worth US$316k over the year to September 2020. That's a slight decrease of 3.2% on the prior year. We note that the salary portion, which stands at US$300.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$354k. So it looks like Bridgeline Digital compensates Ari Kahn in line with the median for the industry.
On an industry level, around 12% of total compensation represents salary and 88% is other remuneration. Bridgeline Digital is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Bridgeline Digital, Inc.'s Growth
Over the past three years, Bridgeline Digital, Inc. has seen its earnings per share (EPS) grow by 91% per year. In the last year, its revenue changed by just 0.9%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Bridgeline Digital, Inc. Been A Good Investment?
Few Bridgeline Digital, Inc. shareholders would feel satisfied with the return of -89% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
Ari receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 4 warning signs for Bridgeline Digital that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
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