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Neil Campbell has been the CEO of Inspiration Healthcare Group plc (LON:IHC) since 2003, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Inspiration Healthcare Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Inspiration Healthcare Group plc's CEO Compensation With the industry
At the time of writing, our data shows that Inspiration Healthcare Group plc has a market capitalization of UK£55m, and reported total annual CEO compensation of UK£247k for the year to January 2020. We note that's an increase of 38% above last year. In particular, the salary of UK£152.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below UK£152m, reported a median total CEO compensation of UK£240k. From this we gather that Neil Campbell is paid around the median for CEOs in the industry. Furthermore, Neil Campbell directly owns UK£3.7m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. There isn't a significant difference between Inspiration Healthcare Group and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Inspiration Healthcare Group plc's Growth
Inspiration Healthcare Group plc has seen its earnings per share (EPS) increase by 28% a year over the past three years. It achieved revenue growth of 48% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Inspiration Healthcare Group plc Been A Good Investment?
With a total shareholder return of 24% over three years, Inspiration Healthcare Group plc shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, Inspiration Healthcare Group plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Inspiration Healthcare Group we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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