In 2016 Lewis Gradon was appointed CEO of Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Lewis Gradon’s Compensation Compare With Similar Sized Companies?
According to our data, Fisher & Paykel Healthcare Corporation Limited has a market capitalization of NZ$8.0b, and pays its CEO total annual compensation worth NZ$2m. That’s a notable increase of 29% on last year. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of NZ$5.9b to NZ$17.8b. The median total CEO compensation was NZ$4m.
A first glance this seems like a real positive for shareholders, since Lewis Gradon is paid less than the average compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Fisher & Paykel Healthcare has changed from year to year.
Is Fisher & Paykel Healthcare Corporation Limited Growing?
Over the last three years Fisher & Paykel Healthcare Corporation Limited has grown its earnings per share (EPS) by an average of 15% per year. Its revenue is up 9.7% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Fisher & Paykel Healthcare Corporation Limited Been A Good Investment?
Boasting a total shareholder return of 86% over three years, Fisher & Paykel Healthcare Corporation Limited has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
Fisher & Paykel Healthcare Corporation Limited is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Lewis Gradon deserves a raise!
It’s not often we see shareholders do so well, and yet the CEO is paid modestly. 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 Fisher & Paykel Healthcare Corporation Limited.
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
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 firstname.lastname@example.org.