Chris Reading became the CEO of U.S. Physical Therapy, Inc. (NYSE:USPH) in 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Chris Reading's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that U.S. Physical Therapy, Inc. has a market cap of US$1.7b, 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$739k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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$4.1m.
That means Chris Reading receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at U.S. Physical Therapy has changed from year to year.
Is U.S. Physical Therapy, Inc. Growing?
U.S. Physical Therapy, Inc. has reduced its earnings per share by an average of 2.4% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 8.5%.
Unfortunately there is a complete lack of earnings per share improvement, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has U.S. Physical Therapy, Inc. Been A Good Investment?
Boasting a total shareholder return of 116% over three years, U.S. Physical Therapy, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Chris Reading is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Shareholders may want to check for free if U.S. Physical Therapy insiders are buying or selling shares.
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.
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