Stock Analysis

How Much Did Prestige Consumer Healthcare's (NYSE:PBH) CEO Pocket Last Year?

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NYSE:PBH
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Ron Lombardi became the CEO of Prestige Consumer Healthcare Inc. (NYSE:PBH) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Prestige Consumer Healthcare

Comparing Prestige Consumer Healthcare Inc.'s CEO Compensation With the industry

Our data indicates that Prestige Consumer Healthcare Inc. has a market capitalization of US$2.1b, and total annual CEO compensation was reported as US$5.1m for the year to March 2020. Notably, that's an increase of 18% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$875k.

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$3.2m. This suggests that Ron Lombardi is paid more than the median for the industry. What's more, Ron Lombardi holds US$8.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$875k US$850k 17%
Other US$4.2m US$3.4m 83%
Total CompensationUS$5.1m US$4.3m100%

Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. In Prestige Consumer Healthcare's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:PBH CEO Compensation February 22nd 2021

A Look at Prestige Consumer Healthcare Inc.'s Growth Numbers

Prestige Consumer Healthcare Inc. has reduced its earnings per share by 23% a year over the last three years. In the last year, its revenue changed by just 0.4%.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Prestige Consumer Healthcare Inc. Been A Good Investment?

With a total shareholder return of 18% over three years, Prestige Consumer Healthcare 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...

As we noted earlier, Prestige Consumer Healthcare pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the amount Ron makes is justifiable.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Prestige Consumer Healthcare you should be aware of, and 1 of them is concerning.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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