In 1999 Vlad Shmunis was appointed CEO of RingCentral, Inc. (NYSE:RNG). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Vlad Shmunis’s Compensation Compare With Similar Sized Companies?
Our data indicates that RingCentral, Inc. is worth US$8.3b, and total annual CEO compensation is US$5.6m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$525k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO compensation of that group was US$6.3m.
So Vlad Shmunis receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at RingCentral has changed from year to year.
Is RingCentral, Inc. Growing?
On average over the last three years, RingCentral, Inc. has grown earnings per share (EPS) by 4.1% each year (using a line of best fit). Its revenue is up 34% over last year.
I like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives! It could be important to check this free visual depiction of what analysts expect for the future.
Has RingCentral, Inc. Been A Good Investment?
I think that the total shareholder return of 549%, over three years, would leave most RingCentral, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Vlad Shmunis is close enough to the median pay for a CEO of a similar sized company .
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at RingCentral.
If you want to buy a stock that is better than RingCentral, this free list of high return, low debt companies is a great place to look.
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