Is nib holdings limited's (ASX:NHF) CEO Pay Fair?

In 2007 Mark Fitzgibbon was appointed CEO of nib holdings limited (ASX:NHF). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for nib holdings

How Does Mark Fitzgibbon's Compensation Compare With Similar Sized Companies?

According to our data, nib holdings limited has a market capitalization of AU$3.1b, and paid its CEO total annual compensation worth AU$3.9m over the year to June 2019. That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from AU$1.5b to AU$4.6b, and discovered that the median CEO total compensation of that group was AU$2.0m.

It would therefore appear that nib holdings limited pays Mark Fitzgibbon more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You might want to check this free visual report on analyst forecasts for future earnings.

You can see a visual representation of the CEO compensation at nib holdings, below.

Is nib holdings limited Growing?

Over the last three years nib holdings limited has grown its earnings per share (EPS) by an average of 9.9% per year (using a line of best fit). In the last year, its revenue is up 8.5%.

I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing.

Has nib holdings limited Been A Good Investment?

Boasting a total shareholder return of 53% over three years, nib holdings limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We compared total CEO remuneration at nib holdings limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying nib holdings shares with their own money (free access).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.