Jon Kessler has been the CEO of HealthEquity, Inc. (NASDAQ:HQY) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Jon Kessler's Compensation Compare With Similar Sized Companies?
According to our data, HealthEquity, Inc. has a market capitalization of US$4.1b, and pays its CEO total annual compensation worth US$4.8m. (This is based on the year to January 2019). We think total compensation is more important but we note that the CEO salary is lower, at US$483k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.
So Jon Kessler is paid around the average of 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 HealthEquity, below.
Is HealthEquity, Inc. Growing?
On average over the last three years, HealthEquity, Inc. has grown earnings per share (EPS) by 45% each year (using a line of best fit). It achieved revenue growth of 25% over the last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has HealthEquity, Inc. Been A Good Investment?
Most shareholders would probably be pleased with HealthEquity, Inc. for providing a total return of 83% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Remuneration for Jon Kessler is close enough to the median pay for a CEO of a similar sized company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying HealthEquity shares with their own money (free access).
Important note: HealthEquity 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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