In 2016 Scott Flanders was appointed CEO of eHealth, Inc. (NASDAQ:EHTH). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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 Scott Flanders’s Compensation Compare With Similar Sized Companies?
Our data indicates that eHealth, Inc. is worth US$2.7b, and total annual CEO compensation was reported as US$3.5m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$600k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
So Scott Flanders 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.
The graphic below shows how CEO compensation at eHealth has changed from year to year.
Is eHealth, Inc. Growing?
On average over the last three years, eHealth, Inc. has grown earnings per share (EPS) by 51% each year (using a line of best fit). Its revenue is up 70% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has eHealth, Inc. Been A Good Investment?
Boasting a total shareholder return of 896% over three years, eHealth, Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Scott Flanders is close enough to the median pay for a CEO of a similar sized company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at eHealth.
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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