Yahoo Finance It's Unlikely That The CEO Of Smartsheet Inc. (NYSE:SMAR) Will See A Huge Pay Rise This Year
Key Insights
Smartsheet's Annual General Meeting to take place on 18th of June
CEO Mark Mader's total compensation includes salary of US$587.1k
The total compensation is similar to the average for the industry
Over the past three years, Smartsheet's EPS grew by 11% and over the past three years, the total loss to shareholders 31%
In the past three years, the share price of Smartsheet Inc. (NYSE:SMAR) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of June. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Smartsheet
Comparing Smartsheet Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Smartsheet Inc. has a market capitalization of US$6.0b, and reported total annual CEO compensation of US$10m for the year to January 2024. That's a notable decrease of 29% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$587k.
On comparing similar companies from the American Software industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$11m. This suggests that Smartsheet remunerates its CEO largely in line with the industry average. Moreover, Mark Mader also holds US$34m worth of Smartsheet stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2024 | 2023 | Proportion (2024) |
Salary | US$587k | US$540k | 6% |
Other | US$9.6m | US$14m | 94% |
Total Compensation | US$10m | US$14m | 100% |
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. In Smartsheet's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Smartsheet Inc.'s Growth
Smartsheet Inc. has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is up 22% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Smartsheet Inc. Been A Good Investment?
Few Smartsheet Inc. shareholders would feel satisfied with the return of -31% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Smartsheet that investors should be aware of in a dynamic business environment.
Important note: Smartsheet 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.
