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Is Q2 Holdings, Inc.'s (NYSE:QTWO) CEO Paid Enough Relative To Peers?

Simply Wall St

In 2013 Matt Flake was appointed CEO of Q2 Holdings, Inc. (NYSE:QTWO). 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Q2 Holdings

How Does Matt Flake's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Q2 Holdings, Inc. has a market cap of US$4.4b, and is paying total annual CEO compensation of US$5.2m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$520k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.

That means Matt Flake 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, below, how CEO compensation at Q2 Holdings has changed over time.

NYSE:QTWO CEO Compensation, August 20th 2019

Is Q2 Holdings, Inc. Growing?

On average over the last three years, Q2 Holdings, Inc. has shrunk earnings per share by 6.2% each year (measured with a line of best fit). In the last year, its revenue is up 29%.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Q2 Holdings, Inc. Been A Good Investment?

I think that the total shareholder return of 224%, over three years, would leave most Q2 Holdings, 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...

Matt Flake is paid around what is normal the leaders of comparable size companies.

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So we can conclude that on this analysis the CEO compensation seems pretty sound. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Q2 Holdings.

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.