Brian Halligan has been the CEO of HubSpot, Inc. (NYSE:HUBS) since 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Brian Halligan’s Compensation Compare With Similar Sized Companies?
Our data indicates that HubSpot, Inc. is worth US$4.9b, and total annual CEO compensation was reported as US$3.1m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$7.8m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of HubSpot. Speaking on an industry level, we can see that nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but HubSpot paid Brian Halligan a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation.
Most shareholders would consider it a positive that Brian Halligan takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business. You can see, below, how CEO compensation at HubSpot has changed over time.
Is HubSpot, Inc. Growing?
Over the last three years HubSpot, Inc. has shrunk its earnings per share by an average of 7.0% per year (measured with a line of best fit). In the last year, its revenue is up 32%.
Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. It’s hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has HubSpot, Inc. Been A Good Investment?
Boasting a total shareholder return of 90% over three years, HubSpot, Inc. has done well by shareholders. 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.
It looks like HubSpot, Inc. pays its CEO less than similar sized companies.
Brian Halligan receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. Shifting gears from CEO pay for a second, we’ve spotted 4 warning signs for HubSpot you should be aware of, and 1 of them is concerning.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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