Most Shareholders Will Probably Agree With Roper Technologies, Inc.'s (NYSE:ROP) CEO Compensation

Simply Wall St
June 07, 2021
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Roper Technologies, Inc. (NYSE:ROP) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 14 June 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Roper Technologies

How Does Total Compensation For Laurence Hunn Compare With Other Companies In The Industry?

According to our data, Roper Technologies, Inc. has a market capitalization of US$47b, and paid its CEO total annual compensation worth US$19m over the year to December 2020. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$896k.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$19m. This suggests that Roper Technologies remunerates its CEO largely in line with the industry average. Furthermore, Laurence Hunn directly owns US$92m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$896k US$1.0m 5%
Other US$18m US$18m 95%
Total CompensationUS$19m US$19m100%

On an industry level, around 8% of total compensation represents salary and 92% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but Roper Technologies paid Laurence Hunn a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NYSE:ROP CEO Compensation June 8th 2021

A Look at Roper Technologies, Inc.'s Growth Numbers

Over the last three years, Roper Technologies, Inc. has shrunk its earnings per share by 1.6% per year. In the last year, its revenue is up 5.1%.

The lack of EPS growth is certainly uninspiring. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Roper Technologies, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Roper Technologies, Inc. for providing a total return of 59% over three years. 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.

To Conclude...

Roper Technologies primarily uses non-salary benefits to reward its CEO. Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Roper Technologies (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Roper Technologies, 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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