Shareholders Will Probably Hold Off On Increasing Pro Medicus Limited's (ASX:PME) CEO Compensation For The Time Being

Key Insights

• Pro Medicus' Annual General Meeting to take place on 25th of November
• Salary of AU$921.5k is part of CEO Sam Hupert's total remuneration
• Total compensation is 48% above industry average
• Over the past three years, Pro Medicus' EPS grew by 39% and over the past three years, the total shareholder return was 241%

CEO Sam Hupert has done a decent job of delivering relatively good performance at Pro Medicus Limited (ASX:PME) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of November. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Pro Medicus

How Does Total Compensation For Sam Hupert Compare With Other Companies In The Industry?

At the time of writing, our data shows that Pro Medicus Limited has a market capitalization of AU$22b, and reported total annual CEO compensation of AU$965k for the year to June 2024. We note that's a decrease of 11% compared to last year. We note that the salary portion, which stands at AU$921.5k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Australian Healthcare Services industry with market capitalizations above AU$12b, reported a median total CEO compensation of AU$652k. Accordingly, our analysis reveals that Pro Medicus Limited pays Sam Hupert north of the industry median. Moreover, Sam Hupert also holds AU$5.3b worth of Pro Medicus stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	AU$921k	AU$723k	95%
Other	AU$44k	AU$367k	5%
Total Compensation	AU$965k	AU$1.1m	100%

On an industry level, around 53% of total compensation represents salary and 47% is other remuneration. Pro Medicus is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Pro Medicus Limited's Growth Numbers

Pro Medicus Limited has seen its earnings per share (EPS) increase by 39% a year over the past three years. It achieved revenue growth of 29% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Pro Medicus Limited Been A Good Investment?

Boasting a total shareholder return of 241% over three years, Pro Medicus 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...

Pro Medicus pays its CEO a majority of compensation through a salary. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Pro Medicus that investors should be aware of in a dynamic business environment.

Important note: Pro Medicus is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.