Andres Reiner has been the CEO of PROS Holdings, Inc. (NYSE:PRO) since 2010, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing PROS Holdings, Inc.’s CEO Compensation With the industry
At the time of writing, our data shows that PROS Holdings, Inc. has a market capitalization of US$1.3b, and reported total annual CEO compensation of US$6.3m for the year to December 2019. That’s a slightly lower by 5.9% over the previous year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$525k.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$5.0m. From this we gather that Andres Reiner is paid around the median for CEOs in the industry. Moreover, Andres Reiner also holds US$25m worth of PROS Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 11% of total compensation represents salary and 89% is other remuneration. In PROS Holdings’ case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
A Look at PROS Holdings, Inc.’s Growth Numbers
Over the past three years, PROS Holdings, Inc. has seen its earnings per share (EPS) grow by 15% per year. In the last year, its revenue is up 17%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has PROS Holdings, Inc. Been A Good Investment?
PROS Holdings, Inc. has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, PROS Holdings, Inc. 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. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.
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’ve identified 3 warning signs for PROS Holdings that investors should be aware of in a dynamic business environment.
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.
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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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