How Is nib holdings' (ASX:NHF) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to Mark Fitzgibbon who has served as CEO of nib holdings limited (ASX:NHF) since 2002. This analysis will also assess whether nib holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for nib holdings

Comparing nib holdings limited's CEO Compensation With the industry

According to our data, nib holdings limited has a market capitalization of AU$2.5b, and paid its CEO total annual compensation worth AU$3.1m over the year to June 2020. That's a notable decrease of 21% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.1m.

In comparison with other companies in the industry with market capitalizations ranging from AU$1.3b to AU$4.2b, the reported median CEO total compensation was AU$2.7m. So it looks like nib holdings compensates Mark Fitzgibbon in line with the median for the industry. Moreover, Mark Fitzgibbon also holds AU$15m worth of nib holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. It's interesting to note that nib holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

nib holdings limited's Growth

nib holdings limited has reduced its earnings per share by 10% a year over the last three years. It achieved revenue growth of 2.5% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced 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 nib holdings limited Been A Good Investment?

Given the total shareholder loss of 9.7% over three years, many shareholders in nib holdings limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, nib holdings limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 4 warning signs for nib holdings that you should be aware of before investing.

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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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. 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.
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