Yahoo Finance What Can We Conclude About Q2 Holdings' (NYSE:QTWO) CEO Pay?
Matt Flake has been the CEO of Q2 Holdings, Inc. (NYSE:QTWO) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Q2 Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Q2 Holdings
Comparing Q2 Holdings, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Q2 Holdings, Inc. has a market capitalization of US$5.1b, and reported total annual CEO compensation of US$7.7m for the year to December 2019. We note that's an increase of 48% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$520k.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$6.5m. This suggests that Q2 Holdings remunerates its CEO largely in line with the industry average. What's more, Matt Flake holds US$477k worth of shares in the company in their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$520k | US$520k | 7% |
Other | US$7.2m | US$4.7m | 93% |
Total Compensation | US$7.7m | US$5.2m | 100% |
Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. It's interesting to note that Q2 Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Q2 Holdings, Inc.'s Growth
Over the last three years, Q2 Holdings, Inc. has shrunk its earnings per share by 44% per year. Its revenue is up 29% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. 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 Q2 Holdings, Inc. Been A Good Investment?
Boasting a total shareholder return of 134% over three years, Q2 Holdings, Inc. has done well by shareholders. 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...
As we noted earlier, Q2 Holdings pays its CEO in line with similar-sized companies belonging to the same industry. The company has logged solid shareholder returns for the past three years. Meanwhile, revenues have been increasing recently On a worrying note, its important to acknowledge that EPS growth has been negative recently. Considering overall performance, it's fair to say Matt is paid reasonably.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Q2 Holdings that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. 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.
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