Key Insights

• Healthcare Services Group to hold its Annual General Meeting on 28th of May
• Salary of US$1.01m is part of CEO Ted Wahl's total remuneration
• Total compensation is similar to the industry average
• Healthcare Services Group's EPS declined by 25% over the past three years while total shareholder loss over the past three years was 59%

The results at Healthcare Services Group, Inc. (NASDAQ:HCSG) have been quite disappointing recently and CEO Ted Wahl bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

How Does Total Compensation For Ted Wahl Compare With Other Companies In The Industry?

At the time of writing, our data shows that Healthcare Services Group, Inc. has a market capitalization of US$843m, and reported total annual CEO compensation of US$4.6m for the year to December 2023. That's just a smallish increase of 3.3% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

On examining similar-sized companies in the American Commercial Services industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$4.7m. This suggests that Healthcare Services Group remunerates its CEO largely in line with the industry average. Furthermore, Ted Wahl directly owns US$5.5m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. Our data reveals that Healthcare Services Group allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Healthcare Services Group, Inc.'s Growth

Over the last three years, Healthcare Services Group, Inc. has shrunk its earnings per share by 25% per year. In the last year, its revenue changed by just 0.2%.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Healthcare Services Group, Inc. Been A Good Investment?

The return of -59% over three years would not have pleased Healthcare Services Group, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

Shareholders may want to check for free if Healthcare Services Group insiders are buying or selling shares.

Important note: Healthcare Services Group 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.