Why Perion Network's (NASDAQ:PERI) CEO Pay Matters

This article will reflect on the compensation paid to Doron Gerstel who has served as CEO of Perion Network Ltd. (NASDAQ:PERI) since 2017. This analysis will also assess whether Perion Network pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Perion Network

Comparing Perion Network Ltd.'s CEO Compensation With the industry

Our data indicates that Perion Network Ltd. has a market capitalization of US$168m, and total annual CEO compensation was reported as US$2.3m for the year to December 2019. Notably, that's an increase of 86% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$714k.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$2.5m. So it looks like Perion Network compensates Doron Gerstel in line with the median for the industry.

On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. Perion Network is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Perion Network Ltd.'s Growth

Perion Network Ltd.'s earnings per share (EPS) grew 98% per year over the last three years. Its revenue is up 9.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Perion Network Ltd. Been A Good Investment?

We think that the total shareholder return of 100%, over three years, would leave most Perion Network Ltd. shareholders smiling. 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 we touched on above, Perion Network Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Perion Network that you should be aware of before investing.

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.

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