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Chad Richison became the CEO of Paycom Software, Inc. (NYSE:PAYC) in 1998. This analysis aims first to contrast CEO compensation with other large companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Chad Richison’s Compensation Compare With Similar Sized Companies?
Our data indicates that Paycom Software, Inc. is worth US$11b, and total annual CEO compensation is US$9.4m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$642k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
That means Chad Richison receives fairly typical remuneration for the CEO of a large company. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Paycom Software has changed from year to year.
Is Paycom Software, Inc. Growing?
Paycom Software, Inc. has increased its earnings per share (EPS) by an average of 45% a year, over the last three years (using a line of best fit). Its revenue is up 31% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Paycom Software, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Paycom Software, Inc. for providing a total return of 523% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Chad Richison is paid around what is normal the leaders of larger companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Paycom Software (free visualization of insider trades).
If you want to buy a stock that is better than Paycom Software, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.