Does SunLink Health Systems' (NYSEMKT:SSY) CEO Salary Compare Well With The Performance Of The Company?

Robert Thornton has been the CEO of SunLink Health Systems, Inc. (NYSEMKT:SSY) since 1998, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether SunLink Health Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for SunLink Health Systems

How Does Total Compensation For Robert Thornton Compare With Other Companies In The Industry?

At the time of writing, our data shows that SunLink Health Systems, Inc. has a market capitalization of US$8.1m, and reported total annual CEO compensation of US$425k for the year to June 2020. That's a slight decrease of 3.5% on the prior year. In particular, the salary of US$366.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$495k. This suggests that SunLink Health Systems remunerates its CEO largely in line with the industry average. Furthermore, Robert Thornton directly owns US$374k worth of shares in the company.

Speaking on an industry level, nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. It's interesting to note that SunLink Health Systems pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

SunLink Health Systems, Inc.'s Growth

Over the past three years, SunLink Health Systems, Inc. has seen its earnings per share (EPS) grow by 8.9% per year. It saw its revenue drop 1.0% over the last year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has SunLink Health Systems, Inc. Been A Good Investment?

Since shareholders would have lost about 25% over three years, some SunLink Health Systems, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, SunLink Health Systems pays its CEO in line with similar-sized companies belonging to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Robert deserves a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for SunLink Health Systems that you should be aware of before investing.

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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