Key Things To Understand About Digital Turbine's (NASDAQ:APPS) CEO Pay Cheque

This article will reflect on the compensation paid to Bill Stone who has served as CEO of Digital Turbine, Inc. (NASDAQ:APPS) since 2014. This analysis will also assess whether Digital Turbine pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Digital Turbine

How Does Total Compensation For Bill Stone Compare With Other Companies In The Industry?

At the time of writing, our data shows that Digital Turbine, Inc. has a market capitalization of US$2.5b, and reported total annual CEO compensation of US$1.4m for the year to March 2020. We note that's an increase of 47% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$550k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.3m. In other words, Digital Turbine pays its CEO lower than the industry median. What's more, Bill Stone holds US$27m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. According to our research, Digital Turbine has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Digital Turbine, Inc.'s Growth

Over the past three years, Digital Turbine, Inc. has seen its earnings per share (EPS) grow by 104% per year. In the last year, its revenue is up 70%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Digital Turbine, Inc. Been A Good Investment?

We think that the total shareholder return of 1,714%, over three years, would leave most Digital Turbine, Inc. 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 noted earlier, Digital Turbine pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

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 Digital Turbine that investors should be aware of in a dynamic business environment.

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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