Bruce Broussard became the CEO of Humana Inc. (NYSE:HUM) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Humana.
How Does Total Compensation For Bruce Broussard Compare With Other Companies In The Industry?
Our data indicates that Humana Inc. has a market capitalization of US$58b, and total annual CEO compensation was reported as US$17m for the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. From this we gather that Bruce Broussard is paid around the median for CEOs in the industry. Furthermore, Bruce Broussard directly owns US$40m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. In Humana's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Humana Inc.'s Growth Numbers
Humana Inc.'s earnings per share (EPS) grew 29% per year over the last three years. In the last year, its revenue is up 16%.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Humana Inc. Been A Good Investment?
Boasting a total shareholder return of 82% over three years, Humana Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, Humana Inc. 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. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Humana that investors should think about before committing capital to this stock.
Switching gears from Humana, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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