Dan Chard became the CEO of Medifast, Inc. (NYSE:MED) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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 Dan Chard's Compensation Compare With Similar Sized Companies?
According to our data, Medifast, Inc. has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$2.2m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$675k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.
Most shareholders would consider it a positive that Dan Chard takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Medifast has changed over time.
Is Medifast, Inc. Growing?
Medifast, Inc. has increased its earnings per share (EPS) by an average of 52% a year, over the last three years (using a line of best fit). Its revenue is up 72% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.
Has Medifast, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Medifast, Inc. for providing a total return of 194% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like Medifast, Inc. pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Dan Chard deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Medifast.
If you want to buy a stock that is better than Medifast, this free list of high return, low debt companies is a great place to look.
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