How Should Investors React To Syneos Health, Inc.’s (NASDAQ:SYNH) CEO Pay?

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Alistair Macdonald has been the CEO of Syneos Health, Inc. (NASDAQ:SYNH) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Syneos Health

How Does Alistair Macdonald’s Compensation Compare With Similar Sized Companies?

According to our data, Syneos Health, Inc. has a market capitalization of US$5.3b, and pays its CEO total annual compensation worth US$7.6m. (This is based on the year to December 2018). That’s a notable increase of 29% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.

So Alistair Macdonald receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Syneos Health, below.

NasdaqGS:SYNH CEO Compensation, June 30th 2019
NasdaqGS:SYNH CEO Compensation, June 30th 2019

Is Syneos Health, Inc. Growing?

Over the last three years Syneos Health, Inc. has shrunk its earnings per share by an average of 76% per year (measured with a line of best fit). It achieved revenue growth of 67% over the last year.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. It’s hard to reach a conclusion about business performance right now. This may be one to watch.

Has Syneos Health, Inc. Been A Good Investment?

I think that the total shareholder return of 35%, over three years, would leave most Syneos Health, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Remuneration for Alistair Macdonald is close enough to the median pay for a CEO of a similar sized company .

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Syneos Health (free visualization of insider trades).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.