Shareholders Would Not Be Objecting To Innodata Inc.'s (NASDAQ:INOD) CEO Compensation And Here's Why

We have been pretty impressed with the performance at Innodata Inc. (NASDAQ:INOD) recently and CEO Jack Abuhoff deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 08 June 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Innodata

How Does Total Compensation For Jack Abuhoff Compare With Other Companies In The Industry?

Our data indicates that Innodata Inc. has a market capitalization of US$167m, and total annual CEO compensation was reported as US$1.1m for the year to December 2020. That's a notable increase of 45% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.0m. From this we gather that Jack Abuhoff is paid around the median for CEOs in the industry. Furthermore, Jack Abuhoff directly owns US$7.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$500k	US$500k	47%
Other	US$564k	US$235k	53%
Total Compensation	US$1.1m	US$735k	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. It's interesting to note that Innodata pays out a greater portion of remuneration through salary, compared to the 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 Innodata Inc.'s Growth Numbers

Innodata Inc.'s earnings per share (EPS) grew 60% per year over the last three years. Its revenue is up 5.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Innodata Inc. Been A Good Investment?

We think that the total shareholder return of 452%, over three years, would leave most Innodata Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 4 warning signs for Innodata 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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