How Should Investors Feel About Synchronoss Technologies' (NASDAQ:SNCR) CEO Remuneration?

By
Simply Wall St
Published
September 17, 2020
NasdaqGS:SNCR

Glenn Lurie became the CEO of Synchronoss Technologies, Inc. (NASDAQ:SNCR) in 2017, 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 assess whether Synchronoss Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Synchronoss Technologies

How Does Total Compensation For Glenn Lurie Compare With Other Companies In The Industry?

At the time of writing, our data shows that Synchronoss Technologies, Inc. has a market capitalization of US$170m, and reported total annual CEO compensation of US$8.0m for the year to December 2019. Notably, that's an increase of 22% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$773k.

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$983k. Hence, we can conclude that Glenn Lurie is remunerated higher than the industry median. Moreover, Glenn Lurie also holds US$2.1m worth of Synchronoss Technologies stock directly under their own name.

Component20192018Proportion (2019)
Salary US$773k US$750k 10%
Other US$7.2m US$5.8m 90%
Total CompensationUS$8.0m US$6.6m100%

Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. Synchronoss Technologies sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqGS:SNCR CEO Compensation September 17th 2020

A Look at Synchronoss Technologies, Inc.'s Growth Numbers

Over the last three years, Synchronoss Technologies, Inc. has shrunk its earnings per share by 2.9% per year. In the last year, its revenue is down 10%.

The lack of EPS growth is certainly unimpressive. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Synchronoss Technologies, Inc. Been A Good Investment?

Given the total shareholder loss of 58% over three years, many shareholders in Synchronoss Technologies, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Synchronoss Technologies, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Synchronoss Technologies that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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