Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Aneel Bhusri has been the CEO of Workday, Inc. (NASDAQ:WDAY) since 2009. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Aneel Bhusri's Compensation Compare With Similar Sized Companies?
According to our data, Workday, Inc. has a market capitalization of US$47b, and pays its CEO total annual compensation worth US$9.8m. (This figure is for the year to January 2019). That's a fairly small increase of 7.5% on year before. While we always look at total compensation first, we note that the salary component is less, at US$65k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So Aneel Bhusri 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 a visual representation of the CEO compensation at Workday, below.
Is Workday, Inc. Growing?
Workday, Inc. has reduced its earnings per share by an average of 2.2% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 33% over the last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Workday, Inc. Been A Good Investment?
I think that the total shareholder return of 165%, over three years, would leave most Workday, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Aneel Bhusri is paid around what is normal the leaders of larger companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So all things considered I'd venture that the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Workday (free visualization of insider trades).
If you want to buy a stock that is better than Workday, 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 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.