We think shareholders may want to consider a review of HealthEquity, Inc.’s CEO compensation package (NASDAQ: HQY)
The results at HealthEquity, Inc. (NASDAQ: HQY) have been quite disappointing recently and CEO Jon Kessler bears some responsibility. Shareholders will be interested in what the board has to say about the turnaround at the next general meeting on June 24, 2021. It will also be an opportunity to challenge the board on the direction of the company and vote on resolutions such as executive compensation. Based on our analysis, we believe CEO compensation may need to be reviewed in light of recent performance.
See our latest analysis for HealthEquity
How does Jon Kessler’s total compensation compare to other companies in the industry?
At the time of writing, our data shows that HealthEquity, Inc. has a market capitalization of US $ 6.5 billion and reported total annual CEO compensation of US $ 9.4 million for the year to January 2021. This is a notable increase of 79% compared to last year. . We think total compensation is more important, but our data shows the CEO salary is less, at US $ 667,000.
Compared to other companies in the industry with market capitalizations ranging from US $ 4.0 billion to US $ 12 billion, the reported median total CEO compensation was US $ 6.7 million. Therefore, we can conclude that Jon Kessler is paid better than the industry median. In addition, Jon Kessler also owns shares of HealthEquity worth US $ 19 million directly under their own name, which tells us that they have a significant personal stake in the company.
|Salary||US $ 667,000||US $ 500,000||7%|
|Other||8.7 million US dollars||4.8 million US dollars||93%|
|Total compensation||9.4 million US dollars||US $ 5.3 million||100%|
At the industry level, approximately 19% of total compensation is salary and 81% is other compensation. HealthEquity sets aside a smaller share of salary compensation, compared to the industry as a whole. If non-salary compensation dominates total salary, it is an indicator that the executive’s salary is linked to the performance of the company.
A look at the growth numbers from HealthEquity, Inc.
Over the past three years, HealthEquity, Inc. has reduced its earnings per share by 60% per year. Its turnover is up 15% compared to last year.
Few shareholders would be happy to read that EPS has declined. While revenue growth is good to see, it is offset by the fact that EPS is down, over three years. So given this relatively poor performance, shareholders probably wouldn’t want high CEO compensation. Going forward, you might want to check out this free visual report at analyst forecasts for the future profits of the company.
Was HealthEquity, Inc. a Good Investment?
Given that shareholders would have lost around 2.7% over three years, some investors in HealthEquity, Inc. would surely feel negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
Along with the poor performance of the company, shareholders have suffered from a low stock price return on their investments, which suggests that there is little or no chance that they are in favor of an increase. CEO salary. At the next AGM, the board of directors will have the opportunity to explain the measures it intends to take to improve the performance of the company.
CEO compensation is an important area to watch, but we also need to pay attention to other attributes of the company. That’s why we did our research and identified 3 warning signs for HealthEquity (1 of which is a bit worrying!) that you need to know to have a comprehensive understanding of the stock.
Arguably, the quality of the company is much more important than the compensation levels of CEOs. So look at this free list of interesting companies that have a HIGH return on equity and low leverage.
If you are looking to trade HealthEquity, open an account with the cheapest * professional approved platform, Interactive Brokers. Their clients from more than 200 countries and territories trade stocks, options, futures, currencies, bonds and funds around the world from a single integrated account.
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
*Interactive Brokers Ranked Least Expensive Broker By StockBrokers.com Online Annual Review 2020
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.