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Is Radware Ltd.'s (NASDAQ:RDWR) CEO Pay Justified?

In 1996 Roy Zisapel was appointed CEO of Radware Ltd. (NASDAQ:RDWR). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Radware

How Does Roy Zisapel's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Radware Ltd. has a market cap of US$1.1b, and reported total annual CEO compensation of US$3.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$420k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.6m.

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So Roy Zisapel is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Radware has changed from year to year.

NasdaqGS:RDWR CEO Compensation, November 13th 2019
NasdaqGS:RDWR CEO Compensation, November 13th 2019

Is Radware Ltd. Growing?

On average over the last three years, Radware Ltd. has grown earnings per share (EPS) by 108% each year (using a line of best fit). In the last year, its revenue is up 8.5%.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.

Has Radware Ltd. Been A Good Investment?

I think that the total shareholder return of 78%, over three years, would leave most Radware Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Remuneration for Roy Zisapel is close enough to the median pay for a CEO of a similar sized company .

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Radware shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.