Joe Flanagan has been the CEO of R1 RCM Inc (NASDAQ:RCM) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Joe Flanagan’s Compensation Compare With Similar Sized Companies?
According to our data, R1 RCM Inc has a market capitalization of US$908m, and pays its CEO total annual compensation worth US$6.4m. Notably, that’s an increase of 24% over the year before. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.2m.
It would therefore appear that R1 RCM Inc pays Joe Flanagan more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at R1 RCM has changed over time.
Is R1 RCM Inc Growing?
R1 RCM Inc has reduced its earnings per share by an average of 33% a year, over the last three years. Its revenue is up 79% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.
It could be important to check this free visual depiction of what analysts expect for the future.
Has R1 RCM Inc Been A Good Investment?
I think that the total shareholder return of 268%, over three years, would leave most R1 RCM Inc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
We examined the amount R1 RCM Inc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling R1 RCM Inc (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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 email@example.com.