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How Should Investors Feel About National HealthCare Corporation's (NYSEMKT:NHC) CEO Pay?

Simply Wall St

Steve Flatt became the CEO of National HealthCare Corporation (NYSEMKT:NHC) in 2017. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for National HealthCare

How Does Steve Flatt's Compensation Compare With Similar Sized Companies?

Our data indicates that National HealthCare Corporation is worth US$1.3b, and total annual CEO compensation is US$1.3m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$393k. 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$4.1m.

Most shareholders would consider it a positive that Steve Flatt takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at National HealthCare, below.

AMEX:NHC CEO Compensation, August 20th 2019

Is National HealthCare Corporation Growing?

On average over the last three years, National HealthCare Corporation has grown earnings per share (EPS) by 14% each year (using a line of best fit). Its revenue is up 1.8% over last year.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has National HealthCare Corporation Been A Good Investment?

I think that the total shareholder return of 38%, over three years, would leave most National HealthCare Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It looks like National HealthCare Corporation pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Steve Flatt deserves a raise!

It's not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying National HealthCare 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.