Frank Williams has been the CEO of Evolent Health, Inc. (NYSE:EVH) since 2011. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Frank Williams's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Evolent Health, Inc. has a market cap of US$856m, and reported total annual CEO compensation of US$3.3m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued 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$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.6m.
That means Frank Williams 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.
The graphic below shows how CEO compensation at Evolent Health has changed from year to year.
Is Evolent Health, Inc. Growing?
Over the last three years Evolent Health, Inc. has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). In the last year, its revenue is up 47%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Evolent Health, Inc. Been A Good Investment?
With a three year total loss of 41%, Evolent Health, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Frank Williams is paid around the same as most CEOs of similar size companies.
We like that the company is growing EPS, but it's disappointing to see negative shareholder returns over three years. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. So you may want to check if insiders are buying Evolent Health shares with their own money (free access).
Important note: Evolent Health 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.
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