Lisa Im has been the CEO of Performant Financial Corporation (NASDAQ:PFMT) since 2004. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does Lisa Im's Compensation Compare With Similar Sized Companies?
According to our data, Performant Financial Corporation has a market capitalization of US$55m, and paid its CEO total annual compensation worth US$424k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$400k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$496k.
So Lisa Im receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Performant Financial, below.
Is Performant Financial Corporation Growing?
On average over the last three years, Performant Financial Corporation has shrunk earnings per share by 38% each year (measured with a line of best fit). It saw its revenue drop 8.8% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Performant Financial Corporation Been A Good Investment?
With a three year total loss of 66%, Performant Financial Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Lisa Im is paid around what is normal the leaders of comparable size companies.
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Performant Financial (free visualization of insider trades).
Important note: Performant Financial may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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