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Is Computer Programs and Systems, Inc.'s (NASDAQ:CPSI) CEO Paid Enough Relative To Peers?

Simply Wall St

John Douglas became the CEO of Computer Programs and Systems, Inc. (NASDAQ:CPSI) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Computer Programs and Systems

How Does John Douglas's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Computer Programs and Systems, Inc. has a market cap of US$296m, and reported total annual CEO compensation of US$1.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$630k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.4m.

That means John Douglas receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Computer Programs and Systems has changed over time.

NasdaqGS:CPSI CEO Compensation, March 13th 2020
NasdaqGS:CPSI CEO Compensation, March 13th 2020

Is Computer Programs and Systems, Inc. Growing?

Over the last three years Computer Programs and Systems, Inc. has grown its earnings per share (EPS) by an average of 51% per year (using a line of best fit). Its revenue is down 2.1% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.

Has Computer Programs and Systems, Inc. Been A Good Investment?

With a three year total loss of 17%, Computer Programs and Systems, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

John Douglas is paid around what is normal for the leaders of comparable size companies.

We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. On another note, we've spotted 4 warning signs for Computer Programs and Systems 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.

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.

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. Thank you for reading.