We Think Some Shareholders May Hesitate To Increase Extreme Networks, Inc.'s (NASDAQ:EXTR) CEO Compensation

Key Insights

• Extreme Networks will host its Annual General Meeting on 8th of November
• Total pay for CEO Ed Meyercord includes US$800.0k salary
• The overall pay is 80% above the industry average
• Extreme Networks' EPS grew by 103% over the past three years while total shareholder return over the past three years was 318%

CEO Ed Meyercord has done a decent job of delivering relatively good performance at Extreme Networks, Inc. (NASDAQ:EXTR) recently. As shareholders go into the upcoming AGM on 8th of November, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Extreme Networks

Comparing Extreme Networks, Inc.'s CEO Compensation With The Industry

According to our data, Extreme Networks, Inc. has a market capitalization of US$2.3b, and paid its CEO total annual compensation worth US$16m over the year to June 2023. Notably, that's an increase of 81% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$800k.

For comparison, other companies in the American Communications industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$9.0m. This suggests that Ed Meyercord is paid more than the median for the industry. Furthermore, Ed Meyercord directly owns US$19m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$800k	US$760k	5%
Other	US$15m	US$8.1m	95%
Total Compensation	US$16m	US$8.9m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Ed Meyercord as compared to non-salary compensation over the one-year period examined. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Extreme Networks, Inc.'s Growth Numbers

Extreme Networks, Inc.'s earnings per share (EPS) grew 103% per year over the last three years. In the last year, its revenue is up 20%.

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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Extreme Networks, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Extreme Networks, Inc. for providing a total return of 318% over three years. 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.

In Summary...

Extreme Networks prefers rewarding its CEO through non-salary benefits. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

So you may want to check if insiders are buying Extreme Networks shares with their own money (free access).

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.