This Is Why Rapid7, Inc.'s (NASDAQ:RPD) CEO Compensation is Generating Buzz
Rapid7 is gearing up to hold its Annual General Meeting on the 13th of June. One of the hot topics of discussion is the CEO, Corey Thomas's, total remuneration package. His salary of US$443.0k is just a part of the whole, which amounts to $3.1 million. Interestingly, this total compensation is actually 49% less than the industry average.
Performance Insights
Over the past few years, Rapid7, Inc. has experienced mixed fortunes. While the company's earnings per share (EPS) grew by 1.1%, shareholders suffered a total loss of 58%. This raises questions about the company's direction and what actions CEO Corey Thomas plans to take to address the situation.
Shareholders have an opportunity to voice their opinions and exercise their influence at the upcoming AGM by voting on matters including executive remuneration. Studies have shown that appropriate compensation incentives play a vital role in driving company performance. Given the available data, we believe that the CEO's compensation is justified.
Financial Snapshot
According to our data, Rapid7, Inc. has a market capitalization of US$2.2b. Corey Thomas's total annual compensation of US$3.1m, though decreased by 63% from the previous year, is still noteworthy. It's important to note that the salary portion of this compensation is relatively lower at US$443k.
Comparing this to other companies in the American software industry with similar market capitalizations, it appears that Corey Thomas is being paid below the median compensation. Additionally, his direct ownership of US$23m worth of Rapid7 stock indicates a significant personal investment in the company.
Compensation Breakdown
The breakdown of Corey Thomas's compensation for 2023 is as follows:
- Salary: US$443k (14%)
- Other: US$2.7m (86%)
- Total Compensation: US$3.1m (100%)
It's worth noting that in the industry, around 17% of total compensation typically represents salary, while the remaining 83% is allocated to other forms of remuneration. Rapid7's lower emphasis on salary in its compensation structure may indicate a stronger alignment with company performance.
Future Outlook
While the company has seen modest growth in revenue and EPS, shareholders are understandably concerned about the overall negative return over the past three years. This underlines the importance of shareholder engagement during the AGM to address these issues with the board.
As investors evaluate their positions in Rapid7, it's recommended to conduct a thorough analysis of the company's performance indicators alongside CEO compensation. Identifying potential warning signs and understanding the company's future trajectory are crucial steps for informed investment decisions.
For further insights and analysis, you can refer to our analysis on potential warning signs for Rapid7.
