Peter Hill is the CEO of RightCrowd Limited (ASX:RCW), and in this article, we analyze the executive's compensation package 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.
Check out our latest analysis for RightCrowd
How Does Total Compensation For Peter Hill Compare With Other Companies In The Industry?
At the time of writing, our data shows that RightCrowd Limited has a market capitalization of AU$94m, and reported total annual CEO compensation of AU$254k for the year to June 2020. That's a modest increase of 3.4% on the prior year. We note that the salary portion, which stands at AU$228.3k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$261m, reported a median total CEO compensation of AU$334k. This suggests that RightCrowd remunerates its CEO largely in line with the industry average.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$228k | AU$220k | 90% |
| Other | AU$25k | AU$25k | 10% |
| Total Compensation | AU$254k | AU$245k | 100% |
On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. It's interesting to note that RightCrowd pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at RightCrowd Limited's Growth Numbers
RightCrowd Limited has seen its earnings per share (EPS) increase by 12% a year over the past three years. In the last year, its revenue is up 23%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has RightCrowd Limited Been A Good Investment?
RightCrowd Limited has generated a total shareholder return of 1.2% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As previously discussed, Peter is compensated close to the median for companies of its size, and which belong to the same industry. 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 pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for RightCrowd (1 is a bit unpleasant!) that you should be aware of before investing here.
Switching gears from RightCrowd, 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. 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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About ASX:GTH
Gathid
Engages in the development of identity governance management software.
Low with mediocre balance sheet.
