The impressive results at LHC Group, Inc. (NASDAQ:LHCG) recently will be great news for shareholders. At the upcoming AGM on 10 June 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
How Does Total Compensation For Keith Myers Compare With Other Companies In The Industry?
At the time of writing, our data shows that LHC Group, Inc. has a market capitalization of US$6.1b, and reported total annual CEO compensation of US$3.3m for the year to December 2020. Notably, that's a decrease of 28% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$996k.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$6.7m. Accordingly, LHC Group pays its CEO under the industry median. What's more, Keith Myers holds US$178m 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 | US$996k | US$900k | 30% |
| Other | US$2.3m | US$3.8m | 70% |
| Total Compensation | US$3.3m | US$4.7m | 100% |
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that LHC Group pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
LHC Group, Inc.'s Growth
Over the past three years, LHC Group, Inc. has seen its earnings per share (EPS) grow by 16% per year. Revenue was pretty flat on last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 LHC Group, Inc. Been A Good Investment?
We think that the total shareholder return of 148%, over three years, would leave most LHC Group, Inc. 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.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for LHC Group that you should be aware of before investing.
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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