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Does MEDNAX, Inc.'s (NYSE:MD) CEO Salary Reflect Performance?

Simply Wall St

Roger Medel has been the CEO of MEDNAX, Inc. (NYSE:MD) since 2003. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for MEDNAX

How Does Roger Medel's Compensation Compare With Similar Sized Companies?

Our data indicates that MEDNAX, Inc. is worth US$1.9b, and total annual CEO compensation is US$9.9m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.

It would therefore appear that MEDNAX, Inc. pays Roger Medel more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at MEDNAX has changed from year to year.

NYSE:MD CEO Compensation, September 11th 2019

Is MEDNAX, Inc. Growing?

On average over the last three years, MEDNAX, Inc. has shrunk earnings per share by 7.6% each year (measured with a line of best fit). In the last year, its revenue is up 4.3%.

Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has MEDNAX, Inc. Been A Good Investment?

Given the total loss of 65% over three years, many shareholders in MEDNAX, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at MEDNAX, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying MEDNAX shares with their own money (free access).

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.

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.

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. Thank you for reading.