Peter Derycz became the CEO of Research Solutions, Inc. (NASDAQ:RSSS) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Peter Derycz's Compensation Compare With Similar Sized Companies?
According to our data, Research Solutions, Inc. has a market capitalization of US$69m, and paid its CEO total annual compensation worth US$556k over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$350k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$605k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Research Solutions. Talking in terms of the sector, salary represented approximately 15% of total compensation out of all the companies we analysed, while other remuneration made up 85% of the pie. Research Solutions pays out 63% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
That means Peter Derycz receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at Research Solutions has changed from year to year.
Is Research Solutions, Inc. Growing?
Over the last three years Research Solutions, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 44% per year (using a line of best fit). Its revenue is up 5.6% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Research Solutions, Inc. Been A Good Investment?
Boasting a total shareholder return of 147% over three years, Research Solutions, Inc. has done well by shareholders. 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.
Peter Derycz is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Taking a breather from CEO compensation, we've spotted 3 warning signs for Research Solutions (of which 1 shouldn't be ignored!) you should know about in order to have a holistic understanding of the stock.
Important note: Research Solutions may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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