This Is The Reason Why We Think Fisher & Paykel Healthcare Corporation Limited's (NZSE:FPH) CEO Deserves A Bump Up To Their Compensation

The impressive results at Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) recently will be great news for shareholders. At the upcoming AGM on 18 August 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for Fisher & Paykel Healthcare

How Does Total Compensation For Lewis Gradon Compare With Other Companies In The Industry?

Our data indicates that Fisher & Paykel Healthcare Corporation Limited has a market capitalization of NZ$18b, and total annual CEO compensation was reported as NZ$4.0m for the year to March 2021. Notably, that's an increase of 25% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at NZ$1.7m.

For comparison, other companies in the industry with market capitalizations above NZ$11b, reported a median total CEO compensation of NZ$10m. Accordingly, Fisher & Paykel Healthcare pays its CEO under the industry median. What's more, Lewis Gradon holds NZ$18m 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 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Fisher & Paykel Healthcare sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Fisher & Paykel Healthcare Corporation Limited's Growth

Over the past three years, Fisher & Paykel Healthcare Corporation Limited has seen its earnings per share (EPS) grow by 40% per year. It achieved revenue growth of 56% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Fisher & Paykel Healthcare Corporation Limited Been A Good Investment?

Most shareholders would probably be pleased with Fisher & Paykel Healthcare Corporation Limited for providing a total return of 122% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Fisher & Paykel Healthcare that investors should be aware of in a dynamic business environment.

Switching gears from Fisher & Paykel 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. 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.
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