Does Digimarc's (NASDAQ:DMRC) CEO Salary Compare Well With Industry Peers?

By
Simply Wall St
Published
November 27, 2020
NasdaqGS:DMRC

Bruce Davis has been the CEO of Digimarc Corporation (NASDAQ:DMRC) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Digimarc.

See our latest analysis for Digimarc

How Does Total Compensation For Bruce Davis Compare With Other Companies In The Industry?

Our data indicates that Digimarc Corporation has a market capitalization of US$578m, and total annual CEO compensation was reported as US$2.5m for the year to December 2019. Notably, that's an increase of 10% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$770k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.1m. Accordingly, our analysis reveals that Digimarc Corporation pays Bruce Davis north of the industry median. Furthermore, Bruce Davis directly owns US$2.1m worth of shares in the company.

Component20192018Proportion (2019)
Salary US$770k US$747k 31%
Other US$1.7m US$1.5m 69%
Total CompensationUS$2.5m US$2.2m100%

On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. Digimarc pays out 31% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NasdaqGS:DMRC CEO Compensation November 27th 2020

A Look at Digimarc Corporation's Growth Numbers

Digimarc Corporation has reduced its earnings per share by 4.8% a year over the last three years. Its revenue is up 3.8% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Digimarc Corporation Been A Good Investment?

With a total shareholder return of 3.8% over three years, Digimarc Corporation has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we touched on above, Digimarc Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS has not been growing sufficiently to impress us, over the last three years. And shareholder returns are decent but not great. So we think more research is needed, but we don't think the CEO is underpaid.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Digimarc that you should be aware of before investing.

Important note: Digimarc 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. 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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