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In 2015 Ron Lombardi was appointed CEO of Prestige Consumer Healthcare Inc. (NYSE:PBH). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Ron Lombardi's Compensation Compare With Similar Sized Companies?
Our data indicates that Prestige Consumer Healthcare Inc. is worth US$1.6b, and total annual CEO compensation is US$4.3m. (This number is for the twelve months until March 2019). That's just a smallish increase of 2.0% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$850k. 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$4.0m.
So Ron Lombardi receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Prestige Consumer Healthcare, below.
Is Prestige Consumer Healthcare Inc. Growing?
Over the last three years Prestige Consumer Healthcare Inc. has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). Its revenue is down -6.3% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Prestige Consumer Healthcare Inc. Been A Good Investment?
With a three year total loss of 45%, Prestige Consumer Healthcare Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Ron Lombardi 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. Shareholders may want to check for free if Prestige Consumer Healthcare insiders are buying or selling shares.
If you want to buy a stock that is better than Prestige Consumer Healthcare, this free list of high return, low debt companies is a great place to look.
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 email@example.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.