Yahoo Finance Is Q2 Holdings, Inc.'s (NYSE:QTWO) CEO Being Overpaid?
Matt Flake became the CEO of Q2 Holdings, Inc. (NYSE:QTWO) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Q2 Holdings
How Does Matt Flake's Compensation Compare With Similar Sized Companies?
Our data indicates that Q2 Holdings, Inc. is worth US$4.3b, and total annual CEO compensation was reported as US$5.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$520k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
So Matt Flake is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Q2 Holdings has changed over time.
Is Q2 Holdings, Inc. Growing?
On average over the last three years, Q2 Holdings, Inc. has shrunk earnings per share by 16% each year (measured with a line of best fit). In the last year, its revenue is up 31%.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Q2 Holdings, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Q2 Holdings, Inc. for providing a total return of 183% over three years. 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...
Matt Flake is paid around what is normal the leaders of comparable size companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Q2 Holdings insiders are buying or selling shares.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
