Is Robert Half International Inc’s (NYSE:RHI) CEO Incentives Align With Yours?

Max Messmer has been the CEO of Robert Half International Inc (NYSE:RHI) since 1987. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Robert Half International

How Does Max Messmer’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Robert Half International Inc has a market cap of US$7.0b, and is paying total annual CEO compensation of US$9m. That’s actually a decrease on the year before. We examined companies with market caps from US$4.0b to US$12.0b, and discovered that the median CEO compensation of that group was US$7m.

That means Max Messmer receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Robert Half International has changed from year to year.

NYSE:RHI CEO Compensation October 29th 18
NYSE:RHI CEO Compensation October 29th 18

Is Robert Half International Inc Growing?

Robert Half International Inc saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease. It achieved revenue growth of 9.2% over the last year.

Unfortunately there is a complete lack of earnings per share improvement, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.

Has Robert Half International Inc Been A Good Investment?

Robert Half International Inc has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

Max Messmer is paid around what is normal the leaders of comparable size companies.

The company isn’t growing earnings per share, and nor have the total returns inspired us. We’re not saying the CEO pay is too generous, but it’s probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. This article has given you an idea about how to analyse CEO remuneration, but it’s important to look at other leaders in the company, too. So it makes sense to check how long the Board of Directors has been in place.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 editorial-team@simplywallst.com.