Here's Why Shareholders Will Not Be Complaining About Qualys, Inc.'s (NASDAQ:QLYS) CEO Pay Packet

Key Insights

• Qualys will host its Annual General Meeting on 12th of June
• Total pay for CEO Sumedh Thakar includes US$558.3k salary
• The overall pay is comparable to the industry average
• Qualys' total shareholder return over the past three years was 34% while its EPS grew by 33% over the past three years

We have been pretty impressed with the performance at Qualys, Inc. (NASDAQ:QLYS) recently and CEO Sumedh Thakar deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 12th of June. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Qualys

Comparing Qualys, Inc.'s CEO Compensation With The Industry

Our data indicates that Qualys, Inc. has a market capitalization of US$4.9b, and total annual CEO compensation was reported as US$7.8m for the year to December 2023. 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$558k.

On comparing similar companies from the American Software industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$11m. From this we gather that Sumedh Thakar is paid around the median for CEOs in the industry. What's more, Sumedh Thakar holds US$10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. In Qualys' case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

Qualys, Inc.'s Growth

Over the past three years, Qualys, Inc. has seen its earnings per share (EPS) grow by 33% per year. It achieved revenue growth of 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Qualys, Inc. Been A Good Investment?

Boasting a total shareholder return of 34% over three years, Qualys, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Qualys.

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

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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.