We Think Some Shareholders May Hesitate To Increase Olo Inc.'s (NYSE:OLO) CEO Compensation

Key Insights

• Olo will host its Annual General Meeting on 20th of June
• Total pay for CEO Noah Glass includes US$500.0k salary
• The overall pay is comparable to the industry average
• Over the past three years, Olo's EPS grew by 32% and over the past three years, the total loss to shareholders 88%

Shareholders of Olo Inc. (NYSE:OLO) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Olo

Comparing Olo Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Olo Inc. has a market capitalization of US$724m, and reported total annual CEO compensation of US$3.0m for the year to December 2023. Notably, that's a decrease of 32% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.

For comparison, other companies in the American Software industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.3m. From this we gather that Noah Glass is paid around the median for CEOs in the industry. Moreover, Noah Glass also holds US$22m worth of Olo stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$500k	US$500k	17%
Other	US$2.5m	US$3.9m	83%
Total Compensation	US$3.0m	US$4.4m	100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Our data reveals that Olo allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Olo Inc.'s Growth

Olo Inc. has seen its earnings per share (EPS) increase by 32% a year over the past three years. In the last year, its revenue is up 24%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Olo Inc. Been A Good Investment?

The return of -88% over three years would not have pleased Olo Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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 2 warning signs for Olo that you should be aware of before investing.

Switching gears from Olo, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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