This article will reflect on the compensation paid to Chris Lien who has served as CEO of Marin Software Incorporated (NASDAQ:MRIN) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Chris Lien Compare With Other Companies In The Industry?
Our data indicates that Marin Software Incorporated has a market capitalization of US$19m, and total annual CEO compensation was reported as US$856k for the year to December 2019. Notably, that’s an increase of 19% over the year before. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$400k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$502k. Accordingly, our analysis reveals that Marin Software Incorporated pays Chris Lien north of the industry median. What’s more, Chris Lien holds US$551k worth of shares in the company in their own name.
On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. It’s interesting to note that Marin Software pays out a greater portion of remuneration through salary, compared to the 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 Marin Software Incorporated’s Growth Numbers
Marin Software Incorporated’s earnings per share (EPS) grew 39% per year over the last three years. In the last year, its revenue is down 36%.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Marin Software Incorporated Been A Good Investment?
Given the total shareholder loss of 79% over three years, many shareholders in Marin Software Incorporated are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Marin Software Incorporated is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can’t say Chris is underpaid, in fact compensation is definitely on the higher side.
CEO compensation is an important area to keep your eyes on, but we’ve also need to pay attention to other attributes of the company. We identified 4 warning signs for Marin Software (1 is significant!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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.