In 2007 Steve Beauchamp was appointed CEO of Paylocity Holding Corporation (NASDAQ:PCTY). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
How Does Steve Beauchamp's Compensation Compare With Similar Sized Companies?
Our data indicates that Paylocity Holding Corporation is worth US$5.1b, and total annual CEO compensation was reported as US$7.2m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$525k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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$7.6m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Paylocity Holding sets aside a smaller share of compensation for salary, in comparison to the overall industry.
That means Steve Beauchamp receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see a visual representation of the CEO compensation at Paylocity Holding, below.
Is Paylocity Holding Corporation Growing?
On average over the last three years, Paylocity Holding Corporation has seen earnings per share (EPS) move in a favourable direction by 67% each year (using a line of best fit). It achieved revenue growth of 24% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Paylocity Holding Corporation Been A Good Investment?
Boasting a total shareholder return of 142% over three years, Paylocity Holding Corporation has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Steve Beauchamp is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Shifting gears from CEO pay for a second, we've picked out 1 warning sign for Paylocity Holding that investors should be aware of in a dynamic business environment.
Important note: Paylocity Holding 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.
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.
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. Thank you for reading.