We Think Some Shareholders May Hesitate To Increase Digimarc Corporation's (NASDAQ:DMRC) CEO Compensation
Key Insights
- Digimarc will host its Annual General Meeting on 7th of May
- Total pay for CEO Riley McCormack includes US$415.0k salary
- The total compensation is similar to the average for the industry
- Digimarc's EPS grew by 11% over the past three years while total shareholder loss over the past three years was 52%
The underwhelming share price performance of Digimarc Corporation (NASDAQ:DMRC) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 7th of May. 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.
View our latest analysis for Digimarc
Comparing Digimarc Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Digimarc Corporation has a market capitalization of US$292m, and reported total annual CEO compensation of US$2.1m for the year to December 2024. Notably, that's a decrease of 9.5% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$415k.
On comparing similar companies from the American Software industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$2.0m. This suggests that Digimarc remunerates its CEO largely in line with the industry average. Furthermore, Riley McCormack directly owns US$32m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$415k | US$375k | 20% |
| Other | US$1.7m | US$2.0m | 80% |
| Total Compensation | US$2.1m | US$2.4m | 100% |
On an industry level, around 11% of total compensation represents salary and 89% is other remuneration. Digimarc is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Digimarc Corporation's Growth Numbers
Over the past three years, Digimarc Corporation has seen its earnings per share (EPS) grow by 11% per year. It achieved revenue growth of 10% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 -52% over three years, Digimarc Corporation shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
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. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Digimarc (2 are a bit unpleasant!) 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. 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.