Yahoo Finance Is Inspiration Healthcare Group plc's (LON:IHC) CEO Pay Justified?
In 2003, Neil Campbell was appointed CEO of Inspiration Healthcare Group plc (LON:IHC). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Inspiration Healthcare Group
How Does Neil Campbell's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Inspiration Healthcare Group plc has a market cap of UK£24m, and reported total annual CEO compensation of UK£179k for the year to January 2019. While we always look at total compensation first, we note that the salary component is less, at UK£147k. We examined a group of similar sized companies, with market capitalizations of below UK£160m. The median CEO total compensation in that group is UK£267k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 66% of total compensation out of all the companies we analysed, while other remuneration made up 34% of the pie. Our data reveals that Inspiration Healthcare Group allocates salary in line with the wider market.
Most shareholders would consider it a positive that Neil Campbell takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at Inspiration Healthcare Group has changed over time.
Is Inspiration Healthcare Group plc Growing?
Over the last three years Inspiration Healthcare Group plc has seen earnings per share (EPS) move in a positive direction by an average of 19% per year (using a line of best fit). In the last year, its revenue is up 15%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Inspiration Healthcare Group plc Been A Good Investment?
Inspiration Healthcare Group plc has generated a total shareholder return of 11% over three years, so most shareholders would 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...
It looks like Inspiration Healthcare Group plc pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Neil Campbell is overcompensated. It's good to see reasonable payment of the CEO, even while the business improves. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Looking into other areas, we've picked out 4 warning signs for Inspiration Healthcare Group that investors should think about before committing capital to this stock.
Important note: Inspiration Healthcare Group 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.
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.
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