This article will reflect on the compensation paid to Rob Eberle who has served as CEO of Bottomline Technologies (de), Inc. (NASDAQ:EPAY) since 2006. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Bottomline Technologies (de), Inc.'s CEO Compensation With the industry
According to our data, Bottomline Technologies (de), Inc. has a market capitalization of US$2.1b, and paid its CEO total annual compensation worth US$5.7m over the year to June 2020. We note that's a decrease of 32% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$398k.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$3.6m. Accordingly, our analysis reveals that Bottomline Technologies (de), Inc. pays Rob Eberle north of the industry median. Furthermore, Rob Eberle directly owns US$23m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. Bottomline Technologies (de) 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.
Bottomline Technologies (de), Inc.'s Growth
Bottomline Technologies (de), Inc. has reduced its earnings per share by 31% a year over the last three years. Its revenue is up 3.7% over the last year.
Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. 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 Bottomline Technologies (de), Inc. Been A Good Investment?
With a total shareholder return of 28% over three years, Bottomline Technologies (de), Inc. shareholders would, in general, 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.
As we noted earlier, Bottomline Technologies (de) pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. And while shareholder returns have been respectable, they have hardly been superb. So you can understand why we do not think CEO compensation is particularly modest!
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Bottomline Technologies (de) that investors should think about before committing capital to this stock.
Switching gears from Bottomline Technologies (de), 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. 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.
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