Vik Verma has been the CEO of 8×8 Inc (NYSE:EGHT) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for 8×8
How Does Vik Verma’s Compensation Compare With Similar Sized Companies?
According to our data, 8×8 Inc has a market capitalization of US$1.7b, and pays its CEO total annual compensation worth US$4.8m. (This figure is for the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$490k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.5m.
Thus we can conclude that Vik Verma receives more in total compensation than the median of a group of companies in the same market, and of similar size to 8×8 Inc. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.
You can see a visual representation of the CEO compensation at 8×8, below.
Is 8×8 Inc Growing?
On average over the last three years, 8×8 Inc has shrunk earnings per share by 119% each year. It achieved revenue growth of 19% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has 8×8 Inc Been A Good Investment?
I think that the total shareholder return of 57%, over three years, would leave most 8×8 Inc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
We examined the amount 8×8 Inc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.On the other hand, returns have been good, so the company is doing something right. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at 8×8.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.