Chris Reading has been the CEO of US Physical Therapy Inc (NYSE:USPH) since 2004. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Chris Reading’s Compensation Compare With Similar Sized Companies?
According to our data, US Physical Therapy Inc has a market capitalization of US$1.4b, and pays its CEO total annual compensation worth US$2.5m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$720k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.6m.
A first glance this seems like a real positive for shareholders, since Chris Reading is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at U.S. Physical Therapy has changed from year to year.
Is US Physical Therapy Inc Growing?
Over the last three years US Physical Therapy Inc has shrunk its earnings per share by an average of 1.5% per year. It achieved revenue growth of 13% over the last year.
Unfortunately there is a complete lack of earnings per share improvement, over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has US Physical Therapy Inc Been A Good Investment?
I think that the total shareholder return of 134%, over three years, would leave most US Physical Therapy Inc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
US Physical Therapy Inc is currently paying its CEO below what is normal for companies of its size.
Chris Reading receives relatively low remuneration compared to similar sized companies. And while the company isn’t growing earnings per share, total returns have been pleasing. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Whatever your view on compensation, you might want to check if insiders are buying or selling US Physical Therapy shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.