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Does eHealth, Inc.'s (NASDAQ:EHTH) CEO Pay Reflect Performance?

Simply Wall St

In 2016 Scott Flanders was appointed CEO of eHealth, Inc. (NASDAQ:EHTH). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for eHealth

How Does Scott Flanders's Compensation Compare With Similar Sized Companies?

According to our data, eHealth, Inc. has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$3.5m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$600k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$4.9m.

That means Scott Flanders receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at eHealth has changed over time.

NasdaqGS:EHTH CEO Compensation, February 21st 2020

Is eHealth, Inc. Growing?

Over the last three years eHealth, Inc. has grown its earnings per share (EPS) by an average of 51% per year (using a line of best fit). Its revenue is up 70% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.

Has eHealth, Inc. Been A Good Investment?

I think that the total shareholder return of 943%, over three years, would leave most eHealth, Inc. shareholders smiling. 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.

In Summary...

Scott Flanders is paid around what is normal the leaders of comparable size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if eHealth insiders are buying or selling shares.

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.