Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Adam Portnoy became the CEO of The RMR Group Inc. (NASDAQ:RMR) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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?
At the time of writing our data says that The RMR Group Inc. has a market cap of US$1.5b, and is paying total annual CEO compensation of US$4.0m. (This figure is for the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$300k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.
So Adam Portnoy receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at RMR Group has changed over time.
Is The RMR Group Inc. Growing?
The RMR Group Inc. has increased its earnings per share (EPS) by an average of 35% a year, over the last three years (using a line of best fit). Its revenue is down -10.0% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. 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?
I think that the total shareholder return of 52%, over three years, would leave most The RMR Group Inc. shareholders smiling. 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.
Adam Portnoy is paid around what is normal the leaders of comparable size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying RMR Group shares with their own money (free access).
Important note: RMR Group 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.
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 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. Thank you for reading.