Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Kate Duchene became the CEO of Resources Connection, Inc. (NASDAQ:RECN) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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 Kate Duchene's Compensation Compare With Similar Sized Companies?
Our data indicates that Resources Connection, Inc. is worth US$516m, and total annual CEO compensation is US$1.6m. (This is based on the year to May 2018). While we always look at total compensation first, we note that the salary component is less, at US$583k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.
That means Kate Duchene receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Resources Connection, below.
Is Resources Connection, Inc. Growing?
Resources Connection, Inc. has reduced its earnings per share by an average of 2.1% a year, over the last three years (measured with a line of best fit). Its revenue is up 18% over last year.
The lack of earnings per share growth in the last three years is unimpressive. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Resources Connection, Inc. Been A Good Investment?
Resources Connection, Inc. has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Kate Duchene is close enough to the median pay for a CEO of a similar sized company .
We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We wouldn't say the CEO pay is too high, but one might argue that the company should improve returns to shareholders before increasing it. Shareholders may want to check for free if Resources Connection insiders are buying or selling shares.
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 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.