Should Shareholders Reconsider Upland Software, Inc.'s (NASDAQ:UPLD) CEO Compensation Package?
Key Insights
- Upland Software will host its Annual General Meeting on 4th of June
- Total pay for CEO Jack McDonald includes US$500.0k salary
- The total compensation is 573% higher than the average for the industry
- Upland Software's three-year loss to shareholders was 83% while its EPS was down 15% over the past three years
Upland Software, Inc. (NASDAQ:UPLD) has not performed well recently and CEO Jack McDonald will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 4th of June. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Upland Software
Comparing Upland Software, Inc.'s CEO Compensation With The Industry
Our data indicates that Upland Software, Inc. has a market capitalization of US$62m, and total annual CEO compensation was reported as US$3.9m for the year to December 2024. That's a notable increase of 34% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$500k.
On comparing similar-sized companies in the American Software industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$580k. Hence, we can conclude that Jack McDonald is remunerated higher than the industry median. Furthermore, Jack McDonald directly owns US$5.6m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$500k | US$325k | 13% |
| Other | US$3.4m | US$2.6m | 87% |
| Total Compensation | US$3.9m | US$2.9m | 100% |
Talking in terms of the industry, salary represented approximately 10% of total compensation out of all the companies we analyzed, while other remuneration made up 90% of the pie. It's interesting to note that Upland Software pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Upland Software, Inc.'s Growth Numbers
Over the last three years, Upland Software, Inc. has shrunk its earnings per share by 15% per year. Its revenue is down 8.2% over the previous year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. 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 Upland Software, Inc. Been A Good Investment?
The return of -83% over three years would not have pleased Upland Software, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Upland Software that investors should think about before committing capital to this stock.
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. 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.