Our Take On MEDNAX, Inc.’s (NYSE:MD) CEO Salary
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In 2003 Roger Medel was appointed CEO of MEDNAX, Inc. (NYSE:MD). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for MEDNAX
How Does Roger Medel’s Compensation Compare With Similar Sized Companies?
According to our data, MEDNAX, Inc. has a market capitalization of US$3.1b, and pays its CEO total annual compensation worth US$7.4m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO compensation of that group was US$4.8m.
Thus we can conclude that Roger Medel receives more in total compensation than the median of a group of companies in the same market, and of similar size to MEDNAX, Inc.. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at MEDNAX has changed from year to year.
Is MEDNAX, Inc. Growing?
On average over the last three years, MEDNAX, Inc. has shrunk earnings per share by 2.6% each year (measured with a line of best fit). In the last year, its revenue is up 5.5%.
The lack of earnings per share growth in the last three years is unimpressive. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has MEDNAX, Inc. Been A Good Investment?
With a three year total loss of 46%, MEDNAX, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We examined the amount MEDNAX, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if MEDNAX 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
