Yahoo Finance Is Zynga Inc.'s (NASDAQ:ZNGA) CEO Paid At A Competitive Rate?
Frank Gibeau has been the CEO of Zynga Inc. (NASDAQ:ZNGA) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Zynga
How Does Frank Gibeau's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Zynga Inc. has a market cap of US$6.2b, and reported total annual CEO compensation of US$9.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$7.2m.
It would therefore appear that Zynga Inc. pays Frank Gibeau more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Zynga has changed over time.
Is Zynga Inc. Growing?
Zynga Inc. has increased its earnings per share (EPS) by an average of 30% a year, over the last three years (using a line of best fit). It achieved revenue growth of 46% over the last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Zynga Inc. Been A Good Investment?
Most shareholders would probably be pleased with Zynga Inc. for providing a total return of 135% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared the total CEO remuneration paid by Zynga Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Looking into other areas, we've picked out 2 warning signs for Zynga that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
