Is HubSpot, Inc.'s (NYSE:HUBS) CEO Pay Fair?
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Brian Halligan has been the CEO of HubSpot, Inc. (NYSE:HUBS) since 2005. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for HubSpot
How Does Brian Halligan's Compensation Compare With Similar Sized Companies?
According to our data, HubSpot, Inc. has a market capitalization of US$7.4b, and pays its CEO total annual compensation worth US$3.1m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.
Most shareholders would consider it a positive that Brian Halligan takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at HubSpot, below.
Is HubSpot, Inc. Growing?
HubSpot, Inc. has reduced its earnings per share by an average of 8.7% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 35% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has HubSpot, Inc. Been A Good Investment?
Most shareholders would probably be pleased with HubSpot, Inc. for providing a total return of 306% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
It appears that HubSpot, Inc. remunerates its CEO below most similar sized companies.
It's well worth noting that while Brian Halligan is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. So you may want to check if insiders are buying HubSpot shares with their own money (free access).
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.
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 editorial-team@simplywallst.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.
