Does UDG Healthcare's (LON:UDG) CEO Salary Compare Well With Industry Peers?

By
Simply Wall St
Published
February 09, 2021
LSE:UDG

This article will reflect on the compensation paid to Brendan McAtamney who has served as CEO of UDG Healthcare plc (LON:UDG) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for UDG Healthcare

How Does Total Compensation For Brendan McAtamney Compare With Other Companies In The Industry?

According to our data, UDG Healthcare plc has a market capitalization of UK£2.0b, and paid its CEO total annual compensation worth US$2.1m over the year to September 2020. We note that's a decrease of 13% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$769k.

On comparing similar companies from the same industry with market caps ranging from UK£1.5b to UK£4.7b, we found that the median CEO total compensation was US$1.2m. Hence, we can conclude that Brendan McAtamney is remunerated higher than the industry median. Moreover, Brendan McAtamney also holds UK£1.9m worth of UDG Healthcare stock directly under their own name.

Component20202019Proportion (2020)
Salary US$769k US$737k 37%
Other US$1.3m US$1.7m 63%
Total CompensationUS$2.1m US$2.4m100%

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. In UDG Healthcare's case, non-salary compensation represents a greater slice of total remuneration, 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.

ceo-compensation
LSE:UDG CEO Compensation February 9th 2021

A Look at UDG Healthcare plc's Growth Numbers

UDG Healthcare plc's earnings per share (EPS) grew 8.5% per year over the last three years. In the last year, its revenue is down 1.5%.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has UDG Healthcare plc Been A Good Investment?

UDG Healthcare plc has not done too badly by shareholders, with a total return of 9.4%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, UDG Healthcare pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company lacks EPS growth, and returns to shareholders are less than stellar, over the last three years. So while shareholders might not be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before thinking a bump in pay is in order.

Shareholders may want to check for free if UDG Healthcare insiders are buying or selling shares.

Switching gears from UDG Healthcare, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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