How Does Bridgeline Digital's (NASDAQ:BLIN) CEO Pay Compare With Company Performance?

Ari Kahn became the CEO of Bridgeline Digital, Inc. (NASDAQ:BLIN) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Bridgeline Digital

Comparing Bridgeline Digital, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Bridgeline Digital, Inc. has a market capitalization of US$12m, and reported total annual CEO compensation of US$316k for the year to September 2020. That's a slight decrease of 3.2% on the prior year. Notably, the salary which is US$300.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$490k. This suggests that Ari Kahn is paid below the industry median.

Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. Bridgeline Digital has gone down a largely traditional route, paying Ari Kahn a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Bridgeline Digital, Inc.'s Growth

Bridgeline Digital, Inc. has seen its earnings per share (EPS) increase by 46% a year over the past three years. It achieved revenue growth of 9.5% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bridgeline Digital, Inc. Been A Good Investment?

With a three year total loss of 98% for the shareholders, Bridgeline Digital, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Ari receives almost all of their compensation through a salary. As we noted earlier, Bridgeline Digital pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Importantly though, the company has impressed with its EPS growth over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Bridgeline Digital (1 is potentially serious!) that you should be aware of before investing here.

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. 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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