Yahoo Finance Here's Why It's Unlikely That Healthcare Services Group, Inc.'s (NASDAQ:HCSG) CEO Will See A Pay Rise This Year
Key Insights
Healthcare Services Group will host its Annual General Meeting on 28th of May
CEO Ted Wahl's total compensation includes salary of US$1.01m
The overall pay is comparable to the industry average
Healthcare Services Group's three-year loss to shareholders was 59% while its EPS was down 25% over the past three years
Healthcare Services Group, Inc. (NASDAQ:HCSG) has not performed well recently and CEO Ted Wahl will probably need to up their game. At the upcoming AGM on 28th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
See our latest analysis for Healthcare Services Group
Comparing Healthcare Services Group, Inc.'s CEO Compensation With The Industry
According to our data, Healthcare Services Group, Inc. has a market capitalization of US$843m, and paid its CEO total annual compensation worth US$4.6m over the year to December 2023. That's a modest increase of 3.3% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
On examining similar-sized companies in the American Commercial Services industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$4.7m. From this we gather that Ted Wahl is paid around the median for CEOs in the industry. What's more, Ted Wahl holds US$5.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$1.0m | 22% |
Other | US$3.6m | US$3.4m | 78% |
Total Compensation | US$4.6m | US$4.4m | 100% |
On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Healthcare Services Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Healthcare Services Group, Inc.'s Growth
Over the last three years, Healthcare Services Group, Inc. has shrunk its earnings per share by 25% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
Few shareholders would be pleased to read that EPS have declined. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Healthcare Services Group, Inc. Been A Good Investment?
Few Healthcare Services Group, Inc. shareholders would feel satisfied with the return of -59% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Healthcare Services Group.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
