U.S. markets closed

How Should Investors React To UDG Healthcare plc's (LON:UDG) CEO Pay?

Simply Wall St

Brendan McAtamney became the CEO of UDG Healthcare plc (LON:UDG) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for UDG Healthcare

How Does Brendan McAtamney's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that UDG Healthcare plc has a market cap of UK£1.9b, and is paying total annual CEO compensation of US$2.0m. (This is based on the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$663k. We looked at a group of companies with market capitalizations from €894m to €2.9b, and the median CEO total compensation was €1.6m.

So Brendan McAtamney is paid around the average of 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 UDG Healthcare, below.

LSE:UDG CEO Compensation, August 15th 2019

Is UDG Healthcare plc Growing?

On average over the last three years, UDG Healthcare plc has shrunk earnings per share by 41% each year (measured with a line of best fit). It saw its revenue drop -1.5% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has UDG Healthcare plc Been A Good Investment?

UDG Healthcare plc has served shareholders reasonably well, with a total return of 32% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Remuneration for Brendan McAtamney is close enough to the median pay for a CEO of a similar sized company .

The company isn't growing earnings per share, and nor have the total returns inspired us. We wouldn't say the CEO pay is too high, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Shareholders may want to check for free if UDG Healthcare insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.