Shareholders Will Probably Hold Off On Increasing Verint Systems Inc.'s (NASDAQ:VRNT) CEO Compensation For The Time Being

Key Insights

• Verint Systems to hold its Annual General Meeting on 10th of July
• Salary of US$790.0k is part of CEO Dan Bodner's total remuneration
• The total compensation is 57% higher than the average for the industry
• Verint Systems' EPS grew by 108% over the past three years while total shareholder loss over the past three years was 28%

In the past three years, the share price of Verint Systems Inc. (NASDAQ:VRNT) has struggled to grow and now shareholders are sitting on a loss. 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 10th of July. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Verint Systems

How Does Total Compensation For Dan Bodner Compare With Other Companies In The Industry?

Our data indicates that Verint Systems Inc. has a market capitalization of US$2.0b, and total annual CEO compensation was reported as US$9.0m for the year to January 2024. That's a notable decrease of 26% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$790k.

In comparison with other companies in the American Software industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$5.7m. Hence, we can conclude that Dan Bodner is remunerated higher than the industry median. Moreover, Dan Bodner also holds US$13m worth of Verint Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Verint Systems pays a modest slice of remuneration through salary, as compared to the broader 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 Verint Systems Inc.'s Growth Numbers

Over the past three years, Verint Systems Inc. has seen its earnings per share (EPS) grow by 108% per year. It achieved revenue growth of 1.6% 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. 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 Verint Systems Inc. Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Verint Systems Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 1 warning sign for Verint Systems 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com