Yahoo Finance We Think Shareholders Are Less Likely To Approve A Pay Rise For JFrog Ltd.'s (NASDAQ:FROG) CEO For Now
Key Insights
JFrog to hold its Annual General Meeting on 20th of May
CEO Shlomi Haim's total compensation includes salary of US$500.0k
The overall pay is comparable to the industry average
Over the past three years, JFrog's EPS fell by 13% and over the past three years, the total loss to shareholders 7.0%
In the past three years, the share price of JFrog Ltd. (NASDAQ:FROG) has struggled to generate growth for its shareholders. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 20th of May and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
See our latest analysis for JFrog
How Does Total Compensation For Shlomi Haim Compare With Other Companies In The Industry?
According to our data, JFrog Ltd. has a market capitalization of US$3.7b, and paid its CEO total annual compensation worth US$7.2m over the year to December 2023. That's a notable increase of 88% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$500k.
On comparing similar companies from the American Software industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$7.0m. From this we gather that Shlomi Haim is paid around the median for CEOs in the industry. Moreover, Shlomi Haim also holds US$156m worth of JFrog stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$500k | US$484k | 7% |
Other | US$6.7m | US$3.3m | 93% |
Total Compensation | US$7.2m | US$3.8m | 100% |
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. JFrog sets aside a smaller share of compensation for 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.
JFrog Ltd.'s Growth
Over the last three years, JFrog Ltd. has shrunk its earnings per share by 13% per year. Its revenue is up 25% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 JFrog Ltd. Been A Good Investment?
With a three year total loss of 7.0% for the shareholders, JFrog Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 4 warning signs for JFrog that investors should be aware of in a dynamic business environment.
Switching gears from JFrog, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
