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How Much Is Sonic Healthcare Limited (ASX:SHL) CEO Getting Paid?

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Simply Wall St
·3 min read
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The CEO of Sonic Healthcare Limited (ASX:SHL) is Colin Goldschmidt, and this article examines 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 Sonic Healthcare.

See our latest analysis for Sonic Healthcare

How Does Total Compensation For Colin Goldschmidt Compare With Other Companies In The Industry?

Our data indicates that Sonic Healthcare Limited has a market capitalization of AU$16b, and total annual CEO compensation was reported as AU$4.5m for the year to June 2020. That's a notable decrease of 28% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$2.2m.

For comparison, other companies in the industry with market capitalizations above AU$10b, reported a median total CEO compensation of AU$13m. This suggests that Colin Goldschmidt is paid below the industry median. Moreover, Colin Goldschmidt also holds AU$26m worth of Sonic Healthcare stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

AU$2.2m

AU$2.4m

49%

Other

AU$2.3m

AU$3.9m

51%

Total Compensation

AU$4.5m

AU$6.3m

100%

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. Sonic Healthcare sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Sonic Healthcare Limited's Growth Numbers

Sonic Healthcare Limited has seen its earnings per share (EPS) increase by 22% a year over the past three years. In the last year, its revenue is up 21%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sonic Healthcare Limited Been A Good Investment?

We think that the total shareholder return of 51%, over three years, would leave most Sonic Healthcare Limited shareholders smiling. 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.

To Conclude...

As previously discussed, Colin is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Considering robust EPS growth, we believe Colin to be modestly paid. Given the strong history of shareholder returns, the shareholders are probably very happy with Colin's performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Sonic Healthcare you should be aware of, and 1 of them can't be ignored.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.