Yahoo Finance It's Unlikely That Yelp Inc.'s (NYSE:YELP) CEO Will See A Huge Pay Rise This Year
Key Insights
Yelp will host its Annual General Meeting on 13th of June
Salary of US$500.0k is part of CEO Jeremy Stoppelman's total remuneration
Total compensation is 156% above industry average
Yelp's EPS grew by 61% over the past three years while total shareholder loss over the past three years was 8.2%
In the past three years, the share price of Yelp Inc. (NYSE:YELP) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 13th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for Yelp
Comparing Yelp Inc.'s CEO Compensation With The Industry
Our data indicates that Yelp Inc. has a market capitalization of US$2.4b, and total annual CEO compensation was reported as US$11m for the year to December 2023. That's a modest increase of 3.1% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.
For comparison, other companies in the American Interactive Media and Services industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$4.4m. Accordingly, our analysis reveals that Yelp Inc. pays Jeremy Stoppelman north of the industry median. Moreover, Jeremy Stoppelman also holds US$26m worth of Yelp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$500k | US$500k | 4% |
Other | US$11m | US$10m | 96% |
Total Compensation | US$11m | US$11m | 100% |
On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but Yelp paid Jeremy Stoppelman a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Yelp Inc.'s Growth
Yelp Inc. has seen its earnings per share (EPS) increase by 61% a year over the past three years. In the last year, its revenue is up 10%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Yelp Inc. Been A Good Investment?
With a three year total loss of 8.2% for the shareholders, Yelp Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Yelp prefers rewarding its CEO through non-salary benefits. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Yelp that you should be aware of before investing.
Important note: Yelp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
