Why We Think Similarweb Ltd.'s (NYSE:SMWB) CEO Compensation Is Not Excessive At All

Key Insights

• Similarweb's Annual General Meeting to take place on 28th of August
• Total pay for CEO Or Offer includes US$425.0k salary
• The total compensation is similar to the average for the industry
• Similarweb's total shareholder return over the past three years was 6.9% while its EPS grew by 69% over the past three years

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Performance at Similarweb Ltd. (NYSE:SMWB) has been reasonably good and CEO Or Offer has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 28th of August. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Similarweb

How Does Total Compensation For Or Offer Compare With Other Companies In The Industry?

At the time of writing, our data shows that Similarweb Ltd. has a market capitalization of US$742m, and reported total annual CEO compensation of US$3.7m for the year to December 2024. That's a notable increase of 13% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$425k.

On examining similar-sized companies in the American Software industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$4.8m. From this we gather that Or Offer is paid around the median for CEOs in the industry. Moreover, Or Offer also holds US$31m worth of Similarweb 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 10% of total compensation out of all the companies we analyzed, while other remuneration made up 90% of the pie. There isn't a significant difference between Similarweb and the broader market, in terms of salary allocation in the overall compensation package. 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 Similarweb Ltd.'s Growth Numbers

Similarweb Ltd. has seen its earnings per share (EPS) increase by 69% a year over the past three years. Its revenue is up 16% 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 decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Similarweb Ltd. Been A Good Investment?

Similarweb Ltd. has not done too badly by shareholders, with a total return of 6.9%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Similarweb (free visualization of insider trades).

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.