Adam Portnoy became the CEO of The RMR Group Inc. (NASDAQ:RMR) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Adam Portnoy's Compensation Compare With Similar Sized Companies?
According to our data, The RMR Group Inc. has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$4.6m over the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$300k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.9m.
That means Adam Portnoy receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at RMR Group has changed over time.
Is The RMR Group Inc. Growing?
On average over the last three years, The RMR Group Inc. has grown earnings per share (EPS) by 23% each year (using a line of best fit). It saw its revenue drop 14% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has The RMR Group Inc. Been A Good Investment?
With a three year total loss of 9.6%, The RMR Group Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Adam Portnoy is paid around what is normal the leaders of comparable size companies.
We'd say the company can boast of its EPS growth, but it's disappointing to see negative shareholder returns over three years. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at RMR Group.
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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