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Colin Shannon has been the CEO of PRA Health Sciences, Inc. (NASDAQ:PRAH) since 2010, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for PRA Health Sciences.
Check out our latest analysis for PRA Health Sciences
How Does Total Compensation For Colin Shannon Compare With Other Companies In The Industry?
According to our data, PRA Health Sciences, Inc. has a market capitalization of US$6.5b, and paid its CEO total annual compensation worth US$7.2m over the year to December 2019. Notably, that’s a decrease of 9.1% over the year before. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$1.0m.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$7.2m. This suggests that PRA Health Sciences remunerates its CEO largely in line with the industry average. What’s more, Colin Shannon holds US$6.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Our data reveals that PRA Health Sciences allocates salary more or less in line with the wider market. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
A Look at PRA Health Sciences, Inc.’s Growth Numbers
PRA Health Sciences, Inc. has seen its earnings per share (EPS) increase by 27% a year over the past three years. In the last year, its revenue is up 5.5%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It’s nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has PRA Health Sciences, Inc. Been A Good Investment?
We think that the total shareholder return of 34%, over three years, would leave most PRA Health Sciences, Inc. shareholders smiling. 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.
As previously discussed, Colin is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider that Colin is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
CEO compensation can have a massive impact on performance, but it’s just one element. That’s why we did some digging and identified 1 warning sign for PRA Health Sciences that investors should think about before committing capital to this stock.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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