Key Insights

• Molina Healthcare to hold its Annual General Meeting on 1st of May
• CEO Joe Zubretsky's total compensation includes salary of US$1.50m
• Total compensation is similar to the industry average
• Molina Healthcare's total shareholder return over the past three years was 39% while its EPS grew by 14% over the past three years

The performance at Molina Healthcare, Inc. (NYSE:MOH) has been quite strong recently and CEO Joe Zubretsky has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 1st of May. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Comparing Molina Healthcare, Inc.'s CEO Compensation With The Industry

According to our data, Molina Healthcare, Inc. has a market capitalization of US$21b, and paid its CEO total annual compensation worth US$21m over the year to December 2023. 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.

For comparison, other companies in the American Healthcare industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$17m. From this we gather that Joe Zubretsky is paid around the median for CEOs in the industry. What's more, Joe Zubretsky holds US$123m 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, around 17% of total compensation represents salary and 83% is other remuneration. It's interesting to note that Molina Healthcare allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Molina Healthcare, Inc.'s Growth

Over the past three years, Molina Healthcare, Inc. has seen its earnings per share (EPS) grow by 14% per year. Its revenue is up 10.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Molina Healthcare, Inc. Been A Good Investment?

Boasting a total shareholder return of 39% over three years, Molina Healthcare, Inc. 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.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Molina Healthcare that you should be aware of before investing.

Important note: Molina Healthcare 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.