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Does Jayex Healthcare Limited's (ASX:JHL) CEO Pay Reflect Performance?

Simply Wall St

In 2017 Nick Fernando was appointed CEO of Jayex Healthcare Limited (ASX:JHL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Jayex Healthcare

How Does Nick Fernando's Compensation Compare With Similar Sized Companies?

According to our data, Jayex Healthcare Limited has a market capitalization of AU$5.2m, and paid its CEO total annual compensation worth AU$257k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at AU$239k. We examined a group of similar sized companies, with market capitalizations of below AU$291m. The median CEO total compensation in that group is AU$380k.

Most shareholders would consider it a positive that Nick Fernando takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Jayex Healthcare, below.

ASX:JHL CEO Compensation, January 20th 2020

Is Jayex Healthcare Limited Growing?

Jayex Healthcare Limited has increased its earnings per share (EPS) by an average of 62% a year, over the last three years (using a line of best fit). Its revenue is down 6.0% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Jayex Healthcare Limited Been A Good Investment?

Since shareholders would have lost about 32% over three years, some Jayex Healthcare Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Jayex Healthcare Limited is currently paying its CEO below what is normal for companies of its size.

Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Nick Fernando is generously paid, it would be good to see an improvement in business performance before too an increase in pay. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Jayex Healthcare (free visualization of insider trades).

Important note: Jayex Healthcare may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.