Is Quest Resource Holding Corporation's (NASDAQ:QRHC) CEO Paid At A Competitive Rate?
S. Hatch became the CEO of Quest Resource Holding Corporation (NASDAQ:QRHC) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Quest Resource Holding
How Does S. Hatch's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Quest Resource Holding Corporation has a market cap of US$19m, and reported total annual CEO compensation of US$799k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$309k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$608k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Quest Resource Holding stands. Speaking on an industry level, we can see that nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. According to our research, Quest Resource Holding has allocated a higher percentage of pay to salary in comparison to the broader sector.
It would therefore appear that Quest Resource Holding Corporation pays S. Hatch more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see, below, how CEO compensation at Quest Resource Holding has changed over time.
Is Quest Resource Holding Corporation Growing?
On average over the last three years, Quest Resource Holding Corporation has seen earnings per share (EPS) move in a favourable direction by 73% each year (using a line of best fit). Its revenue is down 4.6% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has Quest Resource Holding Corporation Been A Good Investment?
With a three year total loss of 49%, Quest Resource Holding Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We examined the amount Quest Resource Holding Corporation pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. On another note, we've spotted 1 warning sign for Quest Resource Holding that investors should look into moving forward.
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.
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.
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