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Should You Worry About Premier, Inc.'s (NASDAQ:PINC) CEO Pay Cheque?

Simply Wall St

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Susan DeVore became the CEO of Premier, Inc. (NASDAQ:PINC) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

Check out our latest analysis for Premier

How Does Susan DeVore's Compensation Compare With Similar Sized Companies?

According to our data, Premier, Inc. has a market capitalization of US$4.9b, and pays its CEO total annual compensation worth US$6.5m. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at US$978k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.

So Susan DeVore receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Premier, below.

NasdaqGS:PINC CEO Compensation, July 11th 2019

Is Premier, Inc. Growing?

Premier, Inc. has reduced its earnings per share by an average of 95% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 3.1% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Premier, Inc. Been A Good Investment?

With a total shareholder return of 15% over three years, Premier, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Remuneration for Susan DeVore is close enough to the median pay for a CEO of a similar sized company .

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. So you may want to check if insiders are buying Premier 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.