Sonic Healthcare Limited's (ASX:SHL) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Sonic Healthcare will host its Annual General Meeting on 20th of November
• Salary of AU$2.37m is part of CEO Colin Goldschmidt's total remuneration
• Total compensation is similar to the industry average
• Sonic Healthcare's EPS declined by 30% over the past three years while total shareholder loss over the past three years was 27%

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Shareholders will probably not be too impressed with the underwhelming results at Sonic Healthcare Limited (ASX:SHL) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of November. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Sonic Healthcare

Comparing Sonic Healthcare Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Sonic Healthcare Limited has a market capitalization of AU$10b, and reported total annual CEO compensation of AU$6.4m for the year to June 2025. Notably, that's an increase of 24% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$2.4m.

On examining similar-sized companies in the Australian Healthcare industry with market capitalizations between AU$6.1b and AU$18b, we discovered that the median CEO total compensation of that group was AU$6.6m. So it looks like Sonic Healthcare compensates Colin Goldschmidt in line with the median for the industry. What's more, Colin Goldschmidt holds AU$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Sonic Healthcare sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sonic Healthcare Limited's Growth Numbers

Sonic Healthcare Limited has reduced its earnings per share by 30% a year over the last three years. Its revenue is up 7.6% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sonic Healthcare Limited Been A Good Investment?

With a three year total loss of 27% for the shareholders, Sonic Healthcare Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Sonic Healthcare that investors should think about before committing capital to this stock.

Important note: Sonic Healthcare 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.