Yahoo Finance We Think Shareholders May Want To Consider A Review Of Laboratory Corporation of America Holdings' (NYSE:LH) CEO Compensation Package
Key Insights
Laboratory Corporation of America Holdings will host its Annual General Meeting on 14th of May
Total pay for CEO Adam Schechter includes US$1.37m salary
The total compensation is similar to the average for the industry
Over the past three years, Laboratory Corporation of America Holdings' EPS fell by 44% and over the past three years, the total loss to shareholders 12%
Shareholders will probably not be too impressed with the underwhelming results at Laboratory Corporation of America Holdings (NYSE:LH) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 14th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Laboratory Corporation of America Holdings
How Does Total Compensation For Adam Schechter Compare With Other Companies In The Industry?
According to our data, Laboratory Corporation of America Holdings has a market capitalization of US$17b, and paid its CEO total annual compensation worth US$16m over the year to December 2023. That's a modest increase of 7.0% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.4m.
In comparison with other companies in the American Healthcare industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$17m. From this we gather that Adam Schechter is paid around the median for CEOs in the industry. Moreover, Adam Schechter also holds US$19m worth of Laboratory Corporation of America Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.4m | US$1.3m | 9% |
Other | US$15m | US$14m | 91% |
Total Compensation | US$16m | US$15m | 100% |
On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. In Laboratory Corporation of America Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Laboratory Corporation of America Holdings' Growth Numbers
Laboratory Corporation of America Holdings has reduced its earnings per share by 44% a year over the last three years. Its revenue is up 4.6% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 Laboratory Corporation of America Holdings Been A Good Investment?
With a three year total loss of 12% for the shareholders, Laboratory Corporation of America Holdings would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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.
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 4 warning signs for Laboratory Corporation of America Holdings that investors should think about before committing capital to this stock.
Switching gears from Laboratory Corporation of America Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
