Yahoo Finance How Should Investors Feel About Extreme Networks, Inc.'s (NASDAQ:EXTR) CEO Pay?
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Ed Meyercord has been the CEO of Extreme Networks, Inc. (NASDAQ:EXTR) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Extreme Networks
How Does Ed Meyercord's Compensation Compare With Similar Sized Companies?
According to our data, Extreme Networks, Inc. has a market capitalization of US$688m, and pays its CEO total annual compensation worth US$4.9m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$623k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.
Thus we can conclude that Ed Meyercord receives more in total compensation than the median of a group of companies in the same market, and of similar size to Extreme Networks, 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 Extreme Networks has changed from year to year.
Is Extreme Networks, Inc. Growing?
On average over the last three years, Extreme Networks, Inc. has grown earnings per share (EPS) by 7.2% each year (using a line of best fit). It achieved revenue growth of 16% over the last year.
I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Extreme Networks, Inc. Been A Good Investment?
I think that the total shareholder return of 63%, over three years, would leave most Extreme Networks, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared total CEO remuneration at Extreme Networks, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Extreme Networks.
If you want to buy a stock that is better than Extreme Networks, this free list of high return, low debt companies is a great place to look.
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.
