In 2016 Lewis Gradon was appointed CEO of Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Lewis Gradon’s Compensation Compare With Similar Sized Companies?
Our data indicates that Fisher & Paykel Healthcare Corporation Limited is worth NZ$8.0b, and total annual CEO compensation is NZ$2m. Notably, that’s an increase of 29% over the year before. We looked at a group of companies with market capitalizations from NZ$5.9b to NZ$17.7b, and the median CEO compensation was NZ$4m.
A first glance this seems like a real positive for shareholders, since Lewis Gradon is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Fisher & Paykel Healthcare has changed over time.
Is Fisher & Paykel Healthcare Corporation Limited Growing?
Over the last three years Fisher & Paykel Healthcare Corporation Limited has grown its earnings per share (EPS) by an average of 15% per year. Its revenue is up 9.7% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Fisher & Paykel Healthcare Corporation Limited Been A Good Investment?
Boasting a total shareholder return of 87% over three years, Fisher & Paykel Healthcare Corporation 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.
It appears that Fisher & Paykel Healthcare Corporation Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Lewis Gradon deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying Fisher & Paykel Healthcare Corporation Limited shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.