Chris Reading has been the CEO of U.S. Physical Therapy, Inc. (NYSE:USPH) since 2004, 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 U.S. Physical Therapy.
View our latest analysis for U.S. Physical Therapy
How Does Total Compensation For Chris Reading Compare With Other Companies In The Industry?
Our data indicates that U.S. Physical Therapy, Inc. has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$2.9m for the year to December 2019. We note that’s a decrease of 14% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$769k.
On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$3.3m. From this we gather that Chris Reading is paid around the median for CEOs in the industry. Moreover, Chris Reading also holds US$6.6m worth of U.S. Physical Therapy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. U.S. Physical Therapy pays out 27% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
A Look at U.S. Physical Therapy, Inc.’s Growth Numbers
Over the past three years, U.S. Physical Therapy, Inc. has seen its earnings per share (EPS) grow by 15% per year. It saw its revenue drop 7.9% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It’s always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has U.S. Physical Therapy, Inc. Been A Good Investment?
We think that the total shareholder return of 40%, over three years, would leave most U.S. Physical Therapy, 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 we noted earlier, U.S. Physical Therapy pays its CEO in line with similar-sized companies belonging to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Although the pay is close to the industry median, overall performance is excellent, so we don’t think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for U.S. Physical Therapy that investors should look into moving forward.
Important note: U.S. Physical Therapy 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.
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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