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Andres Reiner became the CEO of PROS Holdings, Inc. (NYSE:PRO) in 2010. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Andres Reiner’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that PROS Holdings, Inc. has a market cap of US$1.4b, and is paying total annual CEO compensation of US$5.0m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$525k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.4m.
Thus we can conclude that Andres Reiner receives more in total compensation than the median of a group of companies in the same market, and of similar size to PROS Holdings, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at PROS Holdings, below.
Is PROS Holdings, Inc. Growing?
On average over the last three years, PROS Holdings, Inc. has grown earnings per share (EPS) by 4.8% each year (using a line of best fit). Its revenue is up 17% over last year.
I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has PROS Holdings, Inc. Been A Good Investment?
I think that the total shareholder return of 275%, over three years, would leave most PROS Holdings, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount PROS Holdings, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling PROS Holdings shares (free trial).
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.
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 email@example.com.