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Is PRA Health Sciences, Inc. (NASDAQ:PRAH) Excessively Paying Its CEO?

Simply Wall St

Colin Shannon became the CEO of PRA Health Sciences, Inc. (NASDAQ:PRAH) in 2010. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for PRA Health Sciences

How Does Colin Shannon's Compensation Compare With Similar Sized Companies?

According to our data, PRA Health Sciences, Inc. has a market capitalization of US$6.2b, and paid its CEO total annual compensation worth US$7.9m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$930k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.

That means Colin Shannon receives fairly typical remuneration for the CEO of a company that size. 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 PRA Health Sciences, below.

NasdaqGS:PRAH CEO Compensation, October 8th 2019

Is PRA Health Sciences, Inc. Growing?

On average over the last three years, PRA Health Sciences, Inc. has grown earnings per share (EPS) by 20% each year (using a line of best fit). In the last year, its revenue is up 10%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has PRA Health Sciences, Inc. Been A Good Investment?

I think that the total shareholder return of 70%, over three years, would leave most PRA Health Sciences, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Colin Shannon is paid around what is normal the leaders of comparable size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling PRA Health Sciences shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.