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How Should Investors React To Barrett Business Services, Inc.'s (NASDAQ:BBSI) CEO Pay?

Simply Wall St

Mike Elich became the CEO of Barrett Business Services, Inc. (NASDAQ:BBSI) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Barrett Business Services

How Does Mike Elich's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Barrett Business Services, Inc. has a market cap of US$654m, and is paying total annual CEO compensation of US$2.6m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$800k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.

That means Mike Elich receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Barrett Business Services, below.

NasdaqGS:BBSI CEO Compensation, July 30th 2019

Is Barrett Business Services, Inc. Growing?

On average over the last three years, Barrett Business Services, Inc. has grown earnings per share (EPS) by 24% each year (using a line of best fit). In the last year, its revenue changed by just 0.06%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has Barrett Business Services, Inc. Been A Good Investment?

I think that the total shareholder return of 117%, over three years, would leave most Barrett Business Services, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Mike Elich is paid around the same as most CEOs of similar size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Barrett Business Services shares (free trial).

Important note: Barrett Business Services may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.