In 2017 Jeff Fox was appointed CEO of Endurance International Group Holdings, Inc. (NASDAQ:EIGI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jeff Fox's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Endurance International Group Holdings, Inc. has a market cap of US$295m, and reported total annual CEO compensation of US$2.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$794k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.5m.
Thus we can conclude that Jeff Fox receives more in total compensation than the median of a group of companies in the same market, and of similar size to Endurance International Group Holdings, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Endurance International Group Holdings has changed from year to year.
Is Endurance International Group Holdings, Inc. Growing?
Endurance International Group Holdings, Inc. has increased its earnings per share (EPS) by an average of 84% a year, over the last three years (using a line of best fit). It saw its revenue drop 2.8% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has Endurance International Group Holdings, Inc. Been A Good Investment?
Since shareholders would have lost about 75% over three years, some Endurance International Group Holdings, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Endurance International Group Holdings, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Moving away from CEO compensation for the moment, we've identified 2 warning signs for Endurance International Group Holdings that you should be aware of before investing.
Important note: Endurance International Group Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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