Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Roku, Inc.'s (NASDAQ:ROKU) CEO For Now
Key Insights
Roku will host its Annual General Meeting on 6th of June
CEO Anthony Wood's total compensation includes salary of US$1.20m
The overall pay is 1,394% above the industry average
Over the past three years, Roku's EPS fell by 98% and over the past three years, the total loss to shareholders 82%
The underwhelming share price performance of Roku, Inc. (NASDAQ:ROKU) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 6th of June, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.
See our latest analysis for Roku
How Does Total Compensation For Anthony Wood Compare With Other Companies In The Industry?
At the time of writing, our data shows that Roku, Inc. has a market capitalization of US$8.3b, and reported total annual CEO compensation of US$20m for the year to December 2023. That's a slight decrease of 3.7% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
For comparison, other companies in the American Entertainment industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$1.4m. Accordingly, our analysis reveals that Roku, Inc. pays Anthony Wood north of the industry median. What's more, Anthony Wood holds US$1.0b 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$1.2m | US$1.2m | 6% |
Other | US$19m | US$20m | 94% |
Total Compensation | US$20m | US$21m | 100% |
Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that Roku allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Roku, Inc.'s Growth Numbers
Over the last three years, Roku, Inc. has shrunk its earnings per share by 98% per year. It achieved revenue growth of 16% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Roku, Inc. Been A Good Investment?
With a total shareholder return of -82% over three years, Roku, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
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 2 warning signs for Roku that investors should think about before committing capital to this stock.
Important note: Roku 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.
