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Despite AMN Healthcare Services, Inc.'s (NYSE:AMN) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 21 April 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
Comparing AMN Healthcare Services, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that AMN Healthcare Services, Inc. has a market capitalization of US$3.6b, and reported total annual CEO compensation of US$6.0m for the year to December 2020. That's a fairly small increase of 7.1% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.3m. So it looks like AMN Healthcare Services compensates Nowakowski Salka in line with the median for the industry. What's more, Nowakowski Salka holds US$1.9m worth of shares in the company in their own name.
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. There isn't a significant difference between AMN Healthcare Services and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
AMN Healthcare Services, Inc.'s Growth
Over the last three years, AMN Healthcare Services, Inc. has shrunk its earnings per share by 19% per year. It achieved revenue growth of 7.7% over the last year.
The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has AMN Healthcare Services, Inc. Been A Good Investment?
AMN Healthcare Services, Inc. has served shareholders reasonably well, with a total return of 15% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for AMN Healthcare Services (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from AMN Healthcare Services, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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