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Is Syneos Health, Inc.'s (NASDAQ:SYNH) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 2016 Alistair Macdonald was appointed CEO of Syneos Health, Inc. (NASDAQ:SYNH). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.

View our latest analysis for Syneos Health

How Does Alistair Macdonald's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Syneos Health, Inc. has a market cap of US$5.2b, and is paying total annual CEO compensation of US$7.6m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.

That means Alistair Macdonald 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.

The graphic below shows how CEO compensation at Syneos Health has changed from year to year.

NasdaqGS:SYNH CEO Compensation, August 28th 2019
NasdaqGS:SYNH CEO Compensation, August 28th 2019

Is Syneos Health, Inc. Growing?

Over the last three years Syneos Health, Inc. has shrunk its earnings per share by an average of 68% per year (measured with a line of best fit). Its revenue is up 31% over last year.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Syneos Health, Inc. Been A Good Investment?

Syneos Health, Inc. has served shareholders reasonably well, with a total return of 15% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Alistair Macdonald is paid around the same as most CEOs of similar size companies.

The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. So you may want to check if insiders are buying Syneos Health shares with their own money (free access).

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.

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.