Yahoo Finance Shareholders Will Probably Hold Off On Increasing BILL Holdings, Inc.'s (NYSE:BILL) CEO Compensation For The Time Being
Key Insights
BILL Holdings' Annual General Meeting to take place on 7th of December
CEO Rene Lacerte's total compensation includes salary of US$550.0k
Total compensation is 106% above industry average
BILL Holdings' three-year loss to shareholders was 45% while its EPS was down 33% over the past three years
Shareholders of BILL Holdings, Inc. (NYSE:BILL) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 7th of December, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
View our latest analysis for BILL Holdings
Comparing BILL Holdings, Inc.'s CEO Compensation With The Industry
According to our data, BILL Holdings, Inc. has a market capitalization of US$7.3b, and paid its CEO total annual compensation worth US$18m over the year to June 2023. Notably, that's an increase of 27% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$550k.
For comparison, other companies in the American Software industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$8.6m. Hence, we can conclude that Rene Lacerte is remunerated higher than the industry median. Moreover, Rene Lacerte also holds US$169m worth of BILL Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$550k | US$500k | 3% |
Other | US$17m | US$13m | 97% |
Total Compensation | US$18m | US$14m | 100% |
Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Rene Lacerte as compared to non-salary compensation over the one-year period examined. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
BILL Holdings, Inc.'s Growth
Over the last three years, BILL Holdings, Inc. has shrunk its earnings per share by 33% per year. Its revenue is up 50% over the last year.
Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 BILL Holdings, Inc. Been A Good Investment?
With a total shareholder return of -45% over three years, BILL Holdings, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
BILL Holdings primarily uses non-salary benefits to reward its CEO. The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for BILL Holdings that investors should think about before committing capital to this stock.
Important note: BILL Holdings 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.
