- Oops!Something went wrong.Please try again later.
Kevin McNamara has been the CEO of Chemed Corporation (NYSE:CHE) since 2001, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Kevin McNamara Compare With Other Companies In The Industry?
Our data indicates that Chemed Corporation has a market capitalization of US$7.5b, and total annual CEO compensation was reported as US$10m for the year to December 2019. Notably, that's an increase of 14% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$10m. This suggests that Chemed remunerates its CEO largely in line with the industry average. Moreover, Kevin McNamara also holds US$65m worth of Chemed stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. Chemed sets aside a smaller share of compensation for salary, in comparison to the overall 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 Chemed Corporation's Growth Numbers
Chemed Corporation's earnings per share (EPS) grew 58% per year over the last three years. It achieved revenue growth of 10.0% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Chemed Corporation Been A Good Investment?
Most shareholders would probably be pleased with Chemed Corporation for providing a total return of 108% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, Chemed Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Chemed that investors should think about before committing capital to this stock.
Switching gears from Chemed, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.