Here's What We Learned About The CEO Pay At Hill-Rom Holdings, Inc. (NYSE:HRC)

By
Simply Wall St
Published
February 25, 2021
NYSE:HRC

John Groetelaars has been the CEO of Hill-Rom Holdings, Inc. (NYSE:HRC) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Hill-Rom Holdings

How Does Total Compensation For John Groetelaars Compare With Other Companies In The Industry?

Our data indicates that Hill-Rom Holdings, Inc. has a market capitalization of US$7.1b, and total annual CEO compensation was reported as US$7.6m for the year to September 2020. That's a fairly small increase of 4.1% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$5.7m. Hence, we can conclude that John Groetelaars is remunerated higher than the industry median. Furthermore, John Groetelaars directly owns US$1.8m worth of shares in the company.

Component20202019Proportion (2020)
Salary US$1.0m US$1.0m 14%
Other US$6.6m US$6.3m 86%
Total CompensationUS$7.6m US$7.3m100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Hill-Rom Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NYSE:HRC CEO Compensation February 25th 2021

A Look at Hill-Rom Holdings, Inc.'s Growth Numbers

Over the past three years, Hill-Rom Holdings, Inc. has seen its earnings per share (EPS) grow by 6.4% per year. In the last year, its revenue changed by just 1.0%.

We'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Hill-Rom Holdings, Inc. Been A Good Investment?

Hill-Rom Holdings, Inc. has served shareholders reasonably well, with a total return of 33% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, Hill-Rom Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, EPS growth is not moving in the right direction, and the returns to shareholders could have been better, over the last three years. Overall, although the company has delivered steady performance, we would like to see an improvement in key metrics before we can say the high CEO compensation is justified.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Hill-Rom Holdings that investors should be aware of in a dynamic business environment.

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

Promoted
If you’re looking to trade Hill-Rom Holdings, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.


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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.