Peter Derycz has been the CEO of Research Solutions, Inc. (NASDAQ:RSSS) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Research Solutions.
Comparing Research Solutions, Inc.'s CEO Compensation With the industry
Our data indicates that Research Solutions, Inc. has a market capitalization of US$62m, and total annual CEO compensation was reported as US$609k for the year to June 2020. Notably, that's an increase of 9.6% over the year before. We note that the salary portion, which stands at US$360.7k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$388k. This suggests that Peter Derycz is paid more than the median for the industry. What's more, Peter Derycz holds US$8.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. Research Solutions is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Research Solutions, Inc.'s Growth
Over the past three years, Research Solutions, Inc. has seen its earnings per share (EPS) grow by 54% per year. It achieved revenue growth of 6.0% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Research Solutions, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Research Solutions, Inc. for providing a total return of 114% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Peter is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, Research Solutions has produced strong EPS growth and shareholder returns over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Peter deserves a raise!
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Research Solutions that investors should be aware of in a dynamic business environment.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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