Yahoo Finance How Much Is Limelight Networks' (NASDAQ:LLNW) CEO Getting Paid?
This article will reflect on the compensation paid to Bob Lento who has served as CEO of Limelight Networks, Inc. (NASDAQ:LLNW) since 2012. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Limelight Networks
Comparing Limelight Networks, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Limelight Networks, Inc. has a market capitalization of US$745m, and reported total annual CEO compensation of US$3.0m for the year to December 2019. That's a slightly lower by 5.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$320k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$3.2m. So it looks like Limelight Networks compensates Bob Lento in line with the median for the industry. What's more, Bob Lento holds US$9.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$320k | US$480k | 11% |
Other | US$2.7m | US$2.7m | 89% |
Total Compensation | US$3.0m | US$3.2m | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Limelight Networks pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Limelight Networks, Inc.'s Growth Numbers
Over the last three years, Limelight Networks, Inc. has shrunk its earnings per share by 22% per year. It achieved revenue growth of 24% over the last year.
Investors would be a bit wary of companies that have lower earnings But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Limelight Networks, Inc. Been A Good Investment?
Boasting a total shareholder return of 69% over three years, Limelight Networks, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As previously discussed, Bob is compensated close to the median for companies of its size, and which belong to the same industry. Shareholder returns for the company have been strong for the last three years. At the same time, revenues are also moving northwards at a healthy pace. However, on a concerning note, EPS is not growing. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Limelight Networks that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. 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.
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