Yahoo Finance Should Shareholders Reconsider Upland Software, Inc.'s (NASDAQ:UPLD) CEO Compensation Package?
Key Insights
Upland Software will host its Annual General Meeting on 5th of June
Total pay for CEO Jack McDonald includes US$325.0k salary
The overall pay is 350% above the industry average
Over the past three years, Upland Software's EPS fell by 47% and over the past three years, the total loss to shareholders 93%
The results at Upland Software, Inc. (NASDAQ:UPLD) have been quite disappointing recently and CEO Jack McDonald bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 5th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Upland Software
Comparing Upland Software, Inc.'s CEO Compensation With The Industry
Our data indicates that Upland Software, Inc. has a market capitalization of US$76m, and total annual CEO compensation was reported as US$2.7m for the year to December 2023. We note that's a decrease of 68% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$325k.
For comparison, other companies in the American Software industry with market capitalizations below US$200m, reported a median total CEO compensation of US$592k. Hence, we can conclude that Jack McDonald is remunerated higher than the industry median. What's more, Jack McDonald holds US$5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$325k | US$325k | 12% |
Other | US$2.3m | US$8.0m | 88% |
Total Compensation | US$2.7m | US$8.3m | 100% |
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. Upland Software sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Upland Software, Inc.'s Growth Numbers
Upland Software, Inc. has reduced its earnings per share by 47% a year over the last three years. Its revenue is down 7.6% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Upland Software, Inc. Been A Good Investment?
The return of -93% over three years would not have pleased Upland Software, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Upland Software that investors should be aware of in a dynamic business environment.
Important note: Upland Software 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.
