In 2014 Jon Kessler was appointed CEO of HealthEquity, Inc. (NASDAQ:HQY). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jon Kessler’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that HealthEquity, Inc. has a market cap of US$5.1b, and is paying total annual CEO compensation of US$4.3m. (This number is for the twelve months until January 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$400k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO compensation was US$6.3m.
Most shareholders would consider it a positive that Jon Kessler takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at HealthEquity, below.
Is HealthEquity, Inc. Growing?
Over the last three years HealthEquity, Inc. has grown its earnings per share (EPS) by an average of 46% per year (using a line of best fit). In the last year, its revenue is up 26%.
This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has HealthEquity, Inc. Been A Good Investment?
Boasting a total shareholder return of 272% over three years, HealthEquity, Inc. has done well by shareholders. 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.
HealthEquity, Inc. is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Jon Kessler deserves a raise!
It’s not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling HealthEquity shares (free trial).
If you want to buy a stock that is better than HealthEquity, this free list of high return, low debt companies is a great place to look.
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 firstname.lastname@example.org. 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.