Key Insights

• Paycor HCM to hold its Annual General Meeting on 23rd of October
• CEO Raul Villar's total compensation includes salary of US$605.2k
• Total compensation is similar to the industry average
• Paycor HCM's three-year loss to shareholders was 56% while its EPS grew by 26% over the past three years

The underwhelming share price performance of Paycor HCM, Inc. (NASDAQ:PYCR) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 23rd of October could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Raul Villar Compare With Other Companies In The Industry?

Our data indicates that Paycor HCM, Inc. has a market capitalization of US$2.5b, and total annual CEO compensation was reported as US$11m for the year to June 2024. That's a fairly small increase of 5.5% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$605k.

On examining similar-sized companies in the American Professional Services industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$8.6m. This suggests that Paycor HCM remunerates its CEO largely in line with the industry average. Furthermore, Raul Villar directly owns US$3.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Paycor HCM sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Paycor HCM, Inc.'s Growth Numbers

Paycor HCM, Inc.'s earnings per share (EPS) grew 26% per year over the last three years. It achieved revenue growth of 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Paycor HCM, Inc. Been A Good Investment?

Few Paycor HCM, Inc. shareholders would feel satisfied with the return of -56% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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.

Whatever your view on compensation, you might want to check if insiders are buying or selling Paycor HCM 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.

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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.