This Is Why Universal Health Services, Inc.'s (NYSE:UHS) CEO Compensation Looks Appropriate

Key Insights

• Universal Health Services' Annual General Meeting to take place on 15th of May
• Salary of US$1.35m is part of CEO Marc Miller's total remuneration
• Total compensation is similar to the industry average
• Universal Health Services' EPS grew by 0.6% over the past three years while total shareholder return over the past three years was 12%

Performance at Universal Health Services, Inc. (NYSE:UHS) has been reasonably good and CEO Marc Miller has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 15th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Universal Health Services

How Does Total Compensation For Marc Miller Compare With Other Companies In The Industry?

Our data indicates that Universal Health Services, Inc. has a market capitalization of US$11b, and total annual CEO compensation was reported as US$14m for the year to December 2023. Notably, that's an increase of 32% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

For comparison, other companies in the American Healthcare industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$17m. From this we gather that Marc Miller is paid around the median for CEOs in the industry. Moreover, Marc Miller also holds US$121m worth of Universal Health Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.4m	US$1.3m	9%
Other	US$13m	US$9.6m	91%
Total Compensation	US$14m	US$11m	100%

Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Universal Health Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Universal Health Services, Inc.'s Growth

Universal Health Services, Inc. saw earnings per share stay pretty flat over the last three years. It achieved revenue growth of 8.0% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Universal Health Services, Inc. Been A Good Investment?

Universal Health Services, Inc. has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Universal Health Services that investors should think about before committing capital to this stock.

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.

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

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.