Dan Chard became the CEO of Medifast, Inc. (NYSE:MED) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dan Chard’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Medifast, Inc. has a market cap of US$1.1b, and reported total annual CEO compensation of US$2.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$675k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.6m.
That means Dan Chard receives fairly typical remuneration for the CEO of a company that size. 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 Medifast has changed from year to year.
Is Medifast, Inc. Growing?
On average over the last three years, Medifast, Inc. has grown earnings per share (EPS) by 52% each year (using a line of best fit). In the last year, its revenue is up 59%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Medifast, Inc. Been A Good Investment?
I think that the total shareholder return of 146%, over three years, would leave most Medifast, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Dan Chard is paid around the same as most CEOs of similar size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Medifast (free visualization of insider trades).
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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