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Should You Worry About Tabula Rasa HealthCare, Inc.'s (NASDAQ:TRHC) CEO Salary Level?

Simply Wall St

Calvin Knowlton has been the CEO of Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

Check out our latest analysis for Tabula Rasa HealthCare

How Does Calvin Knowlton's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Tabula Rasa HealthCare, Inc. has a market cap of US$1.1b, and reported total annual CEO compensation of US$3.5m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$561k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.

So Calvin Knowlton is paid around the average of 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.

The graphic below shows how CEO compensation at Tabula Rasa HealthCare has changed from year to year.

NasdaqGM:TRHC CEO Compensation, October 3rd 2019

Is Tabula Rasa HealthCare, Inc. Growing?

Tabula Rasa HealthCare, Inc. has reduced its earnings per share by an average of 36% a year, over the last three years (measured with a line of best fit). Its revenue is up 48% over last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Tabula Rasa HealthCare, Inc. Been A Good Investment?

Boasting a total shareholder return of 290% over three years, Tabula Rasa HealthCare, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Calvin Knowlton is paid around what is normal the leaders of comparable size companies.

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. So you may want to check if insiders are buying Tabula Rasa HealthCare shares with their own money (free access).

If you want to buy a stock that is better than Tabula Rasa HealthCare, 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 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.