Gordon MacLeod became the CEO of Ryman Healthcare Limited (NZSE:RYM) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Gordon MacLeod’s Compensation Compare With Similar Sized Companies?
Our data indicates that Ryman Healthcare Limited is worth NZ$7.6b, and total annual CEO compensation was reported as NZ$1.2m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at NZ$993k. We looked at a group of companies with market capitalizations from NZ$3.2b to NZ$10b, and the median CEO total compensation was NZ$2.1m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Ryman Healthcare has changed over time.
Is Ryman Healthcare Limited Growing?
Ryman Healthcare Limited has reduced its earnings per share by an average of 2.7% a year, over the last three years (measured with a line of best fit). Its revenue is up 11% over last year.
Unfortunately there is a complete lack of earnings per share improvement, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Ryman Healthcare Limited Been A Good Investment?
Most shareholders would probably be pleased with Ryman Healthcare Limited for providing a total return of 82% 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.
It looks like Ryman Healthcare Limited pays its CEO less than similar sized companies.
Gordon MacLeod receives relatively low remuneration compared to similar sized companies. And while the company isn’t growing earnings per share, total returns have been pleasing. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Whatever your view on compensation, you might want to check if insiders are buying or selling Ryman Healthcare shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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