How Much Did Heidrick & Struggles International's (NASDAQ:HSII) CEO Pocket Last Year?

Krishnan Rajagopalan has been the CEO of Heidrick & Struggles International, Inc. (NASDAQ:HSII) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Heidrick & Struggles International.

Check out our latest analysis for Heidrick & Struggles International

How Does Total Compensation For Krishnan Rajagopalan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Heidrick & Struggles International, Inc. has a market capitalization of US$396m, and reported total annual CEO compensation of US$4.3m for the year to December 2019. That's a modest increase of 6.2% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$850k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.4m. Hence, we can conclude that Krishnan Rajagopalan is remunerated higher than the industry median. Moreover, Krishnan Rajagopalan also holds US$2.0m worth of Heidrick & Struggles International stock directly under their own name.

Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. Although there is a difference in how total compensation is set, Heidrick & Struggles International more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Heidrick & Struggles International, Inc.'s Growth Numbers

Over the past three years, Heidrick & Struggles International, Inc. has seen its earnings per share (EPS) grow by 81% per year. Its revenue is down 5.3% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Heidrick & Struggles International, Inc. Been A Good Investment?

Heidrick & Struggles International, Inc. has generated a total shareholder return of 7.2% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we noted earlier, Heidrick & Struggles International pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Heidrick & Struggles International 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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