Key Insights

• Robert Half to hold its Annual General Meeting on 15th of May
• Salary of US$500.0k is part of CEO M. Waddell's total remuneration
• The overall pay is comparable to the industry average
• Robert Half's EPS grew by 5.5% over the past three years while total shareholder loss over the past three years was 16%

Shareholders of Robert Half Inc. (NYSE:RHI) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For M. Waddell Compare With Other Companies In The Industry?

Our data indicates that Robert Half Inc. has a market capitalization of US$7.2b, and total annual CEO compensation was reported as US$8.1m for the year to December 2023. We note that's a decrease of 13% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$500k.

On examining similar-sized companies in the American Professional Services industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$10m. So it looks like Robert Half compensates M. Waddell in line with the median for the industry. Moreover, M. Waddell also holds US$96m worth of Robert Half stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. Robert Half pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Robert Half Inc.'s Growth Numbers

Robert Half Inc.'s earnings per share (EPS) grew 5.5% per year over the last three years. In the last year, its revenue is down 14%.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Robert Half Inc. Been A Good Investment?

With a three year total loss of 16% for the shareholders, Robert Half Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Robert Half that investors should look into moving forward.

Important note: Robert Half is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.