Key Insights

• Upwork to hold its Annual General Meeting on 7th of June
• Total pay for CEO Hayden Brown includes US$570.0k salary
• Total compensation is 67% above industry average
• Upwork's EPS grew by 47% over the past three years while total shareholder loss over the past three years was 77%

Shareholders of Upwork Inc. (NASDAQ:UPWK) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 7th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Hayden Brown Compare With Other Companies In The Industry?

At the time of writing, our data shows that Upwork Inc. has a market capitalization of US$1.4b, and reported total annual CEO compensation of US$9.5m for the year to December 2023. We note that's an increase of 12% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$570k.

On comparing similar companies from the American Professional Services industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$5.7m. This suggests that Hayden Brown is paid more than the median for the industry. What's more, Hayden Brown holds US$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Upwork sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Upwork Inc.'s Growth Numbers

Upwork Inc. has seen its earnings per share (EPS) increase by 47% a year over the past three years. It achieved revenue growth of 13% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Upwork Inc. Been A Good Investment?

Few Upwork Inc. shareholders would feel satisfied with the return of -77% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

Whatever your view on compensation, you might want to check if insiders are buying or selling Upwork shares (free trial).

Important note: Upwork 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.