Yahoo Finance Here's What We Learned About The CEO Pay At Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH)
Lewis Gradon has been the CEO of Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Fisher & Paykel Healthcare
Comparing Fisher & Paykel Healthcare Corporation Limited's CEO Compensation With the industry
Our data indicates that Fisher & Paykel Healthcare Corporation Limited has a market capitalization of NZ$19b, and total annual CEO compensation was reported as NZ$3.2m for the year to March 2020. We note that's an increase of 20% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at NZ$1.3m.
For comparison, other companies in the industry with market capitalizations above NZ$11b, reported a median total CEO compensation of NZ$9.0m. This suggests that Lewis Gradon is paid below the industry median. What's more, Lewis Gradon holds NZ$19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | NZ$1.3m | NZ$1.2m | 42% |
Other | NZ$1.9m | NZ$1.4m | 58% |
Total Compensation | NZ$3.2m | NZ$2.7m | 100% |
On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. In Fisher & Paykel Healthcare's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Fisher & Paykel Healthcare Corporation Limited's Growth
Fisher & Paykel Healthcare Corporation Limited has seen its earnings per share (EPS) increase by 31% a year over the past three years. Its revenue is up 42% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Fisher & Paykel Healthcare Corporation Limited Been A Good Investment?
We think that the total shareholder return of 154%, over three years, would leave most Fisher & Paykel Healthcare Corporation Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As we noted earlier, Fisher & Paykel Healthcare pays its CEO lower than the norm for similar-sized companies belonging to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Lewis deserves a raise!
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Fisher & Paykel Healthcare that investors should look into moving forward.
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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