Robert Half Inc.'s (NYSE:RHI) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Robert Half's Annual General Meeting to take place on 15th of May
• CEO M. Waddell's total compensation includes salary of US$500.0k
• Total compensation is similar to the industry average
• Over the past three years, Robert Half's EPS grew by 5.5% and over the past three years, the total loss to shareholders 16%

The underwhelming share price performance of Robert Half Inc. (NYSE:RHI) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Robert Half

How Does Total Compensation For M. Waddell Compare With Other Companies In The Industry?

Our data indicates that Robert Half Inc. has a market capitalization of US$7.2b, and total annual CEO compensation was reported as US$8.1m for the year to December 2023. Notably, that's a decrease of 13% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.

In comparison with other companies in the American Professional Services industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$10m. This suggests that Robert Half remunerates its CEO largely in line with the industry average. Moreover, M. Waddell also holds US$96m worth of Robert Half stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$500k	US$500k	6%
Other	US$7.6m	US$8.9m	94%
Total Compensation	US$8.1m	US$9.4m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Robert Half pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Robert Half Inc.'s Growth Numbers

Over the past three years, Robert Half Inc. has seen its earnings per share (EPS) grow by 5.5% per year. It saw its revenue drop 14% over the last year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Robert Half Inc. Been A Good Investment?

With a three year total loss of 16% for the shareholders, Robert Half Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Robert Half that investors should look into moving forward.

Switching gears from Robert Half, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.