In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2008 Ross Johnston was appointed CEO of Regis Healthcare Limited (ASX:REG). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Regis Healthcare
How Does Ross Johnston's Compensation Compare With Similar Sized Companies?
According to our data, Regis Healthcare Limited has a market capitalization of AU$896m, and pays its CEO total annual compensation worth AU$1.1m. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$786k. We examined companies with market caps from AU$575m to AU$2.3b, and discovered that the median CEO total compensation of that group was AU$1.4m.
That means Ross Johnston receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Regis Healthcare has changed from year to year.
Is Regis Healthcare Limited Growing?
Regis Healthcare Limited has reduced its earnings per share by an average of 3.4% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 6.9% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Regis Healthcare Limited Been A Good Investment?
Since shareholders would have lost about 26% over three years, some Regis Healthcare Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Remuneration for Ross Johnston is close enough to the median pay for a CEO of a similar sized company .
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. So you may want to check if insiders are buying Regis Healthcare shares with their own money (free access).