We Think Shareholders Will Probably Be Generous With Paylocity Holding Corporation's (NASDAQ:PCTY) CEO Compensation

It would be hard to discount the role that CEO Steve Beauchamp has played in delivering the impressive results at Paylocity Holding Corporation (NASDAQ:PCTY) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 01 December 2022. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Our analysis indicates that PCTY is potentially overvalued!

How Does Total Compensation For Steve Beauchamp Compare With Other Companies In The Industry?

Our data indicates that Paylocity Holding Corporation has a market capitalization of US$12b, and total annual CEO compensation was reported as US$15m for the year to June 2022. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$560k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. From this we gather that Steve Beauchamp is paid around the median for CEOs in the industry. Moreover, Steve Beauchamp also holds US$407m worth of Paylocity Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	US$560k	US$560k	4%
Other	US$15m	US$14m	96%
Total Compensation	US$15m	US$15m	100%

On an industry level, around 8% of total compensation represents salary and 92% is other remuneration. Paylocity Holding has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Paylocity Holding Corporation's Growth

Paylocity Holding Corporation's earnings per share (EPS) grew 14% per year over the last three years. It achieved revenue growth of 36% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Paylocity Holding Corporation Been A Good Investment?

We think that the total shareholder return of 78%, over three years, would leave most Paylocity Holding Corporation shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Paylocity Holding prefers rewarding its CEO through non-salary benefits. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 1 warning sign for Paylocity Holding that investors should look into moving forward.

Switching gears from Paylocity Holding, 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.