Our Take On Fisher & Paykel Healthcare Corporation Limited's (NZSE:FPH) CEO Salary

Lewis Gradon has been the CEO of Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) since 2016. This analysis aims first to contrast CEO compensation with other large companies. 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. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Fisher & Paykel Healthcare

How Does Lewis Gradon's Compensation Compare With Similar Sized Companies?

Our data indicates that Fisher & Paykel Healthcare Corporation Limited is worth NZ$18b, and total annual CEO compensation was reported as NZ$2.7m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at NZ$1.2m. We looked at a group of companies with market capitalizations over NZ$13b and the median CEO total compensation was NZ$6.2m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Fisher & Paykel Healthcare stands. On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. It's interesting to note that Fisher & Paykel Healthcare allocates a smaller portion of compensation to salary in comparison to the broader industry.

At first glance this seems like a real positive for shareholders, since Lewis Gradon is paid less than the average total compensation paid by other large companies. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at Fisher & Paykel Healthcare has changed over time.

Is Fisher & Paykel Healthcare Corporation Limited Growing?

Fisher & Paykel Healthcare Corporation Limited has seen earnings per share (EPS) move positively by an average of 12% a year, over the last three years (using a line of best fit). It achieved revenue growth of 9.3% over the last year.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Fisher & Paykel Healthcare Corporation Limited Been A Good Investment?

Boasting a total shareholder return of 217% over three years, Fisher & Paykel Healthcare Corporation Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It appears that Fisher & Paykel Healthcare Corporation Limited remunerates its CEO below most large companies.

Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Lewis Gradon deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Fisher & Paykel Healthcare shares (free trial).

Important note: Fisher & Paykel Healthcare 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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