Yahoo Finance EPAM Systems, Inc.'s (NYSE:EPAM) CEO Compensation Looks Acceptable To Us And Here's Why
Key Insights
EPAM Systems will host its Annual General Meeting on 31st of May
Salary of US$812.5k is part of CEO Arkadiy Dobkin's total remuneration
The total compensation is 58% less than the average for the industry
Over the past three years, EPAM Systems' EPS grew by 5.9% and over the past three years, the total loss to shareholders 62%
Shareholders may be wondering what CEO Arkadiy Dobkin plans to do to improve the less than great performance at EPAM Systems, Inc. (NYSE:EPAM) recently. At the next AGM coming up on 31st of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.
View our latest analysis for EPAM Systems
Comparing EPAM Systems, Inc.'s CEO Compensation With The Industry
Our data indicates that EPAM Systems, Inc. has a market capitalization of US$10b, and total annual CEO compensation was reported as US$7.5m for the year to December 2023. That's a notable increase of 17% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$813k.
For comparison, other companies in the American IT industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$18m. Accordingly, EPAM Systems pays its CEO under the industry median. Furthermore, Arkadiy Dobkin directly owns US$309m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$813k | US$775k | 11% |
Other | US$6.7m | US$5.7m | 89% |
Total Compensation | US$7.5m | US$6.5m | 100% |
On an industry level, roughly 26% of total compensation represents salary and 74% is other remuneration. It's interesting to note that EPAM Systems allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
EPAM Systems, Inc.'s Growth
Over the past three years, EPAM Systems, Inc. has seen its earnings per share (EPS) grow by 5.9% per year. Its revenue is down 4.5% over the previous year.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 EPAM Systems, Inc. Been A Good Investment?
Few EPAM Systems, Inc. shareholders would feel satisfied with the return of -62% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
The fact that shareholders have earned a negative share price return is certainly disconcerting. The lacklustre earnings growth perhaps may have something to do with the downward trend in the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for EPAM Systems that investors should look into moving forward.
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.
