Does Sonic Healthcare Limited’s (ASX:SHL) CEO Pay Matter?

The CEO of Sonic Healthcare Limited (ASX:SHL) is Colin Goldschmidt. 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.

Check out our latest analysis for Sonic Healthcare

How Does Colin Goldschmidt’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Sonic Healthcare Limited has a market cap of AU$14b, and reported total annual CEO compensation of AU$5.5m for the year to June 2019. Notably, that’s an increase of 8.9% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at AU$2.4m. When we examined a selection of companies with market caps ranging from AU$5.8b to AU$17b, we found the median CEO total compensation was AU$4.3m.

So Colin Goldschmidt receives a similar amount to the median CEO pay, amongst 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.

You can see a visual representation of the CEO compensation at Sonic Healthcare, below.

ASX:SHL CEO Compensation, November 7th 2019
ASX:SHL CEO Compensation, November 7th 2019

Is Sonic Healthcare Limited Growing?

On average over the last three years, Sonic Healthcare Limited has grown earnings per share (EPS) by 2.8% each year (using a line of best fit). It achieved revenue growth of 11% over the last year.

I would argue that the modest growth in revenue is a notable positive. And the improvement in earnings per share is modest but respectable. So while performance isn’t amazing, we think it really does seem quite respectable. You might want to check this free visual report on analyst forecasts for future earnings.

Has Sonic Healthcare Limited Been A Good Investment?

Most shareholders would probably be pleased with Sonic Healthcare Limited for providing a total return of 53% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Remuneration for Colin Goldschmidt is close enough to the median pay for a CEO of a similar sized company .

The company isn’t showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sonic Healthcare (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at 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.