U.S. Physical Therapy, Inc.'s (NYSE:USPH) CEO Compensation Looks Acceptable To Us And Here's Why

Under the guidance of CEO Chris Reading, U.S. Physical Therapy, Inc. (NYSE:USPH) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 18 May 2021. We present our case of why we think CEO compensation looks fair.

See our latest analysis for U.S. Physical Therapy

Comparing U.S. Physical Therapy, Inc.'s CEO Compensation With the industry

Our data indicates that U.S. Physical Therapy, Inc. has a market capitalization of US$1.5b, and total annual CEO compensation was reported as US$3.0m for the year to December 2020. That's just a smallish increase of 3.8% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$676k.

On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$3.0m. So it looks like U.S. Physical Therapy compensates Chris Reading in line with the median for the industry. Moreover, Chris Reading also holds US$9.6m worth of U.S. Physical Therapy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$676k	US$769k	23%
Other	US$2.3m	US$2.1m	77%
Total Compensation	US$3.0m	US$2.9m	100%

On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. According to our research, U.S. Physical Therapy has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

U.S. Physical Therapy, Inc.'s Growth

Over the past three years, U.S. Physical Therapy, Inc. has seen its earnings per share (EPS) grow by 15% per year. In the last year, its revenue is down 12%.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has U.S. Physical Therapy, Inc. Been A Good Investment?

With a total shareholder return of 33% over three years, U.S. Physical Therapy, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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 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. We did our research and spotted 2 warning signs for U.S. Physical Therapy that investors should look into moving forward.

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. 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.
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