How Should Investors Feel About Premier Inc’s (NASDAQ:PINC) CEO Pay?

Susan DeVore became the CEO of Premier Inc (NASDAQ:PINC) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

View our latest analysis for Premier

How Does Susan DeVore’s Compensation Compare With Similar Sized Companies?

Our data indicates that Premier Inc is worth US$5.2b, and total annual CEO compensation is US$6.5m. (This figure is for the year to 2018). That’s a modest increase of 4.7% on the prior year year. While we always look at total compensation first, we note that the salary component is less, at US$978k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO compensation was US$6.9m.

That means Susan DeVore 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 Premier has changed over time.

NasdaqGS:PINC CEO Compensation November 29th 18
NasdaqGS:PINC CEO Compensation November 29th 18

Is Premier Inc Growing?

Over the last three years Premier Inc has shrunk its earnings per share by an average of 47% per year. Its revenue is up 9.2% over last year.

Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Premier Inc Been A Good Investment?

Premier Inc has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

Susan DeVore is paid around what is normal the leaders of comparable size companies.

We’re not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn’t say the CEO pay is too high, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. Shareholders may want to check for free if Premier insiders are buying or selling shares.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

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 editorial-team@simplywallst.com.