Key Insights
- Labcorp Holdings to hold its Annual General Meeting on 15th of May
- Total pay for CEO Adam Schechter includes US$1.42m salary
- The total compensation is similar to the average for the industry
- Labcorp Holdings' total shareholder return over the past three years was 25% while its EPS was down 26% over the past three years
Despite positive share price growth of 25% for Labcorp Holdings Inc. (NYSE:LH) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 15th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
View our latest analysis for Labcorp Holdings
Comparing Labcorp Holdings Inc.'s CEO Compensation With The Industry
According to our data, Labcorp Holdings Inc. has a market capitalization of US$20b, and paid its CEO total annual compensation worth US$19m over the year to December 2024. That's a notable increase of 21% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.4m.
For comparison, other companies in the American Healthcare industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$19m. From this we gather that Adam Schechter is paid around the median for CEOs in the industry. Furthermore, Adam Schechter directly owns US$26m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.4m | US$1.4m | 7% |
| Other | US$18m | US$15m | 93% |
| Total Compensation | US$19m | US$16m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. In Labcorp Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Labcorp Holdings Inc.'s Growth
Over the last three years, Labcorp Holdings Inc. has shrunk its earnings per share by 26% per year. In the last year, its revenue is up 7.1%.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Labcorp Holdings Inc. Been A Good Investment?
Labcorp Holdings Inc. has served shareholders reasonably well, with a total return of 25% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
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. We've identified 1 warning sign for Labcorp Holdings that investors should be aware of in a dynamic business environment.
Switching gears from Labcorp Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.