How Should Investors Feel About RPC Inc’s (NYSE:RES) CEO Pay?
In 2003 Richard Hubbell was appointed CEO of RPC Inc (NYSE:RES). 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for RPC
How Does Richard Hubbell’s Compensation Compare With Similar Sized Companies?
According to our data, RPC Inc has a market capitalization of US$2.8b, and pays its CEO total annual compensation worth US$2.2m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$900k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO compensation was US$4.9m.
Most shareholders would consider it a positive that Richard Hubbell takes less 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, below, how CEO compensation at RPC has changed over time.
Is RPC Inc Growing?
RPC Inc has increased its earnings per share (EPS) by an average of 96% a year, over the last three years It achieved revenue growth of 28% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
You might want to check this free visual report on analyst forecasts for future earnings.
Has RPC Inc Been A Good Investment?
RPC Inc has not done too badly by shareholders, with a total return of 6.0%, over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
It looks like RPC Inc pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn’t mean that Richard Hubbell is paid too much.
It’s good to see reasonable payment of the CEO, even while the business improves. But for me, it’s even better if insiders are also buying shares with their own cold, hard, cash. So you may want to check if insiders are buying RPC shares with their own money (free access).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
