Dominic O’Hanlon became the CEO of rhipe Limited (ASX:RHP) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dominic O’Hanlon’s Compensation Compare With Similar Sized Companies?
Our data indicates that rhipe Limited is worth AU$169m, and total annual CEO compensation is AU$1m. That’s a notable increase of 44% on last year. We looked at a group of companies with market capitalizations under AU$278m, and the median CEO compensation was AU$355k.
Thus we can conclude that Dominic O’Hanlon receives more in total compensation than the median of a group of companies in the same market, and of similar size to rhipe Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at rhipe has changed over time.
Is rhipe Limited Growing?
Over the last three years rhipe Limited has grown its earnings per share (EPS) by an average of 113% per year. It achieved revenue growth of 25% over the last year.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has rhipe Limited Been A Good Investment?
Since shareholders would have lost about 20% over three years, some rhipe Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at rhipe Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. So shareholders might not feel great about the fact that CEO pay increased on last year. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying rhipe Limited shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.