We Think Shareholders May Want To Consider A Review Of Robert Half Inc.'s (NYSE:RHI) CEO Compensation Package

Key Insights

• Robert Half will host its Annual General Meeting on 14th of May
• Salary of US$500.0k is part of CEO M. Waddell's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Robert Half's EPS fell by 30% and over the past three years, the total loss to shareholders 50%

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Robert Half Inc. (NYSE:RHI) has not performed well recently and CEO M. Waddell will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 14th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Robert Half

Comparing Robert Half Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Robert Half Inc. has a market capitalization of US$4.4b, and reported total annual CEO compensation of US$7.0m for the year to December 2024. That's a notable decrease of 14% on last year. 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$2.0b to US$6.4b, the reported median CEO total compensation was US$7.2m. From this we gather that M. Waddell is paid around the median for CEOs in the industry. Furthermore, M. Waddell directly owns US$62m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 12% of total compensation represents salary, while the remainder of 88% is other remuneration. It's interesting to note that Robert Half allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Robert Half Inc.'s Growth

Robert Half Inc. has reduced its earnings per share by 30% a year over the last three years. It saw its revenue drop 7.8% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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?

Few Robert Half Inc. shareholders would feel satisfied with the return of -50% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Robert Half that investors should be aware of in a dynamic business environment.

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.

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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.