Here's Why It's Unlikely That U.S. Physical Therapy, Inc.'s (NYSE:USPH) CEO Will See A Pay Rise This Year

Key Insights

• U.S. Physical Therapy's Annual General Meeting to take place on 20th of May
• CEO Chris Reading's total compensation includes salary of US$974.4k
• The total compensation is similar to the average for the industry
• U.S. Physical Therapy's EPS declined by 9.0% over the past three years while total shareholder loss over the past three years was 25%

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Shareholders will probably not be too impressed with the underwhelming results at U.S. Physical Therapy, Inc. (NYSE:USPH) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for U.S. Physical Therapy

Comparing U.S. Physical Therapy, Inc.'s CEO Compensation With The Industry

According to our data, U.S. Physical Therapy, Inc. has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$3.6m over the year to December 2024. That's a modest increase of 7.8% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$974k.

On examining similar-sized companies in the American Healthcare industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.5m. So it looks like U.S. Physical Therapy compensates Chris Reading in line with the median for the industry. Furthermore, Chris Reading directly owns US$9.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$974k	US$959k	27%
Other	US$2.7m	US$2.4m	73%
Total Compensation	US$3.6m	US$3.4m	100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. It's interesting to note that U.S. Physical Therapy pays out a greater portion of remuneration through salary, compared to the 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 U.S. Physical Therapy, Inc.'s Growth Numbers

U.S. Physical Therapy, Inc. has reduced its earnings per share by 9.0% a year over the last three years. It achieved revenue growth of 14% over the last year.

Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 U.S. Physical Therapy, Inc. Been A Good Investment?

Since shareholders would have lost about 25% over three years, some U.S. Physical Therapy, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for U.S. Physical Therapy 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.

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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.