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In 1987 Max Messmer was appointed CEO of Robert Half International Inc. (NYSE:RHI). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Max Messmer’s Compensation Compare With Similar Sized Companies?
According to our data, Robert Half International Inc. has a market capitalization of US$6.4b, and pays its CEO total annual compensation worth US$9.1m. (This figure is for the year to December 2018). That’s just a smallish increase of 3.8% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$525k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$7.0m.
As you can see, Max Messmer is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Robert Half International Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Robert Half International has changed over time.
Is Robert Half International Inc. Growing?
On average over the last three years, Robert Half International Inc. has grown earnings per share (EPS) by 8.1% each year (using a line of best fit). Its revenue is up 9.3% over last year.
I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has Robert Half International Inc. Been A Good Investment?
Most shareholders would probably be pleased with Robert Half International Inc. for providing a total return of 42% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Robert Half International Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Robert Half International shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.