How Does Molina Healthcare's (NYSE:MOH) CEO Salary Compare to Peers?
This article will reflect on the compensation paid to Joe Zubretsky who has served as CEO of Molina Healthcare, Inc. (NYSE:MOH) since 2017. This analysis will also assess whether Molina Healthcare pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Molina Healthcare
How Does Total Compensation For Joe Zubretsky Compare With Other Companies In The Industry?
Our data indicates that Molina Healthcare, Inc. has a market capitalization of US$12b, and total annual CEO compensation was reported as US$18m for the year to December 2019. We note that's an increase of 18% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. From this we gather that Joe Zubretsky is paid around the median for CEOs in the industry. Moreover, Joe Zubretsky also holds US$23m worth of Molina Healthcare stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$1.3m | US$1.3m | 7% |
Other | US$17m | US$14m | 93% |
Total Compensation | US$18m | US$15m | 100% |
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. In Molina Healthcare's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Molina Healthcare, Inc.'s Growth Numbers
Molina Healthcare, Inc. has seen its earnings per share (EPS) increase by 81% a year over the past three years. In the last year, its revenue is up 5.9%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Molina Healthcare, Inc. Been A Good Investment?
Boasting a total shareholder return of 174% over three years, Molina Healthcare, Inc. has done well by shareholders. 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...
As previously discussed, Joe is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Molina Healthcare that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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 editorial-team@simplywallst.com.
