What Can We Learn About intelliHR's (ASX:IHR) CEO Compensation?

The CEO of intelliHR Limited (ASX:IHR) is Rob Bromage, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for intelliHR

Comparing intelliHR Limited's CEO Compensation With the industry

Our data indicates that intelliHR Limited has a market capitalization of AU$96m, and total annual CEO compensation was reported as AU$493k for the year to June 2020. That's a notable increase of 15% on last year. Notably, the salary which is AU$300.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$333k. Hence, we can conclude that Rob Bromage is remunerated higher than the industry median. What's more, Rob Bromage holds AU$12m 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 60% of total compensation represents salary and 40% is other remuneration. Although there is a difference in how total compensation is set, intelliHR more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at intelliHR Limited's Growth Numbers

intelliHR Limited's earnings per share (EPS) grew 11% per year over the last three years. Its revenue is up 160% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has intelliHR Limited Been A Good Investment?

Boasting a total shareholder return of 38% over three years, intelliHR Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, intelliHR pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Rob deserves a raise!

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for intelliHR (2 make us uncomfortable!) that you should be aware of before investing here.

Important note: intelliHR is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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