We Think Shareholders Are Less Likely To Approve A Pay Rise For Surgery Partners, Inc.'s (NASDAQ:SGRY) CEO For Now

Key Insights

• Surgery Partners will host its Annual General Meeting on 6th of June
• CEO J. Evans' total compensation includes salary of US$1.05m
• The overall pay is comparable to the industry average
• Over the past three years, Surgery Partners' EPS grew by 86% and over the past three years, the total loss to shareholders 55%

In the past three years, the share price of Surgery Partners, Inc. (NASDAQ:SGRY) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 6th of June could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Surgery Partners

How Does Total Compensation For J. Evans Compare With Other Companies In The Industry?

According to our data, Surgery Partners, Inc. has a market capitalization of US$3.4b, and paid its CEO total annual compensation worth US$6.5m over the year to December 2023. That's a fairly small increase of 6.0% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

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$7.1m. This suggests that Surgery Partners remunerates its CEO largely in line with the industry average. What's more, J. Evans holds US$13m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.1m	16%
Other	US$5.4m	US$5.0m	84%
Total Compensation	US$6.5m	US$6.1m	100%

On an industry level, around 21% of total compensation represents salary and 79% is other remuneration. Surgery Partners pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Surgery Partners, Inc.'s Growth Numbers

Surgery Partners, Inc. has seen its earnings per share (EPS) increase by 86% a year over the past three years. It achieved revenue growth of 7.1% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Surgery Partners, Inc. Been A Good Investment?

The return of -55% over three years would not have pleased Surgery Partners, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Surgery Partners (1 is a bit concerning!) that you should be aware of before investing here.

Switching gears from Surgery Partners, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.