It Looks Like Shareholders Would Probably Approve Alignment Healthcare, Inc.'s (NASDAQ:ALHC) CEO Compensation Package

Key Insights

• Alignment Healthcare will host its Annual General Meeting on 5th of June
• Salary of US$817.3k is part of CEO John Kao's total remuneration
• The total compensation is similar to the average for the industry
• Alignment Healthcare's EPS grew by 11% over the past three years while total shareholder return over the past three years was 47%

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The performance at Alignment Healthcare, Inc. (NASDAQ:ALHC) has been quite strong recently and CEO John Kao has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 5th of June. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Alignment Healthcare

Comparing Alignment Healthcare, Inc.'s CEO Compensation With The Industry

Our data indicates that Alignment Healthcare, Inc. has a market capitalization of US$2.9b, and total annual CEO compensation was reported as US$6.4m for the year to December 2024. That's a notable decrease of 55% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$817k.

On comparing similar companies from the American Healthcare industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$7.0m. This suggests that Alignment Healthcare remunerates its CEO largely in line with the industry average. Furthermore, John Kao directly owns US$49m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Alignment Healthcare pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Alignment Healthcare, Inc.'s Growth Numbers

Alignment Healthcare, Inc.'s earnings per share (EPS) grew 11% per year over the last three years. Its revenue is up 49% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Alignment Healthcare, Inc. Been A Good Investment?

Boasting a total shareholder return of 47% over three years, Alignment Healthcare, Inc. 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.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Alignment Healthcare that investors should be aware of in a dynamic business environment.

Important note: Alignment Healthcare is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.