Is Computer Programs and Systems, Inc.'s (NASDAQ:CPSI) CEO Overpaid Relative To Its Peers?

John Douglas has been the CEO of Computer Programs and Systems, Inc. (NASDAQ:CPSI) since 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Computer Programs and Systems

How Does John Douglas's Compensation Compare With Similar Sized Companies?

According to our data, Computer Programs and Systems, Inc. has a market capitalization of US$416m, and pays its CEO total annual compensation worth US$1.8m. (This is based on the year to December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$630k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.6m.

That means John Douglas receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Computer Programs and Systems has changed over time.

Is Computer Programs and Systems, Inc. Growing?

On average over the last three years, Computer Programs and Systems, Inc. has shrunk earnings per share by 68% each year (measured with a line of best fit). In the last year, its revenue is up 1.3%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Computer Programs and Systems, Inc. Been A Good Investment?

Given the total loss of 36% over three years, many shareholders in Computer Programs and Systems, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

John Douglas is paid around what is normal the leaders of comparable size companies.

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. So you may want to check if insiders are buying Computer Programs and Systems shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this freelist of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.