Yahoo Finance Is HMS Holdings Corp. (NASDAQ:HMSY) Overpaying Its CEO?
In 2009 Bill Lucia was appointed CEO of HMS Holdings Corp. (NASDAQ:HMSY). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for HMS Holdings
How Does Bill Lucia's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that HMS Holdings Corp. has a market cap of US$2.4b, and reported total annual CEO compensation of US$4.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$700k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
So Bill Lucia is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at HMS Holdings has changed from year to year.
Is HMS Holdings Corp. Growing?
HMS Holdings Corp. has increased its earnings per share (EPS) by an average of 41% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 4.7%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has HMS Holdings Corp. Been A Good Investment?
With a total shareholder return of 27% over three years, HMS Holdings Corp. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Bill Lucia is paid around the same as most CEOs of similar size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at HMS Holdings.
Important note: HMS Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
