NYSE:CNC) in 1996, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether Centene pays its CEO appropriately, considering recent earnings growth and total shareholder returns.” data-reactid=”28″>Michael Neidorff became the CEO of Centene Corporation (NYSE:CNC) in 1996, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether Centene pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Centene ” data-reactid=”29″> View our latest analysis for Centene
How Does Total Compensation For Michael Neidorff Compare With Other Companies In The Industry?
At the time of writing, our data shows that Centene Corporation has a market capitalization of US$35b, and reported total annual CEO compensation of US$26m for the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$1.5m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$16m. Hence, we can conclude that Michael Neidorff is remunerated higher than the industry median. What’s more, Michael Neidorff holds US$394m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Centene sets aside a smaller share of compensation for salary, in comparison to the overall industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
Centene Corporation’s Growth
Centene Corporation has seen its earnings per share (EPS) increase by 11% a year over the past three years. In the last year, its revenue is up 32%.
this free visualization of analyst forecasts.” data-reactid=”54″>Shareholders would be glad to know that the company has improved itself over the last few years. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has Centene Corporation Been A Good Investment?
Boasting a total shareholder return of 36% over three years, Centene Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we touched on above, Centene Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Michael deserves a raise!
3 warning signs for Centene (1 is a bit concerning!) that you should be aware of before investing here.” data-reactid=”59″>It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company’s key performance areas. We identified 3 warning signs for Centene (1 is a bit concerning!) that you should be aware of before investing here.
this list of interesting companies with high ROE and low debt. ” data-reactid=”60″>Important note: Centene is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”65″>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.