In 2016 Joseph Papa was appointed CEO of Bausch Health Companies Inc. (NYSE:BHC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Joseph Papa's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Bausch Health Companies Inc. has a market cap of US$7.9b, and is paying total annual CEO compensation of US$15m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.5m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.8m.
As you can see, Joseph Papa is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Bausch Health Companies Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Bausch Health Companies has changed from year to year.
Is Bausch Health Companies Inc. Growing?
On average over the last three years, Bausch Health Companies Inc. has shrunk earnings per share by 13% each year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue hardly impresses. 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 Bausch Health Companies Inc. Been A Good Investment?
Given the total loss of 18% over three years, many shareholders in Bausch Health Companies Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Bausch Health Companies Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! Shareholders may want to check for free if Bausch Health Companies insiders are buying or selling shares.
Important note: Bausch Health Companies 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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If you spot an error that warrants correction, please contact the editor at email@example.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.