Key Insights

• Premier to hold its Annual General Meeting on 1st of December
• Salary of US$1.07m is part of CEO Mike Alkire's total remuneration
• Total compensation is similar to the industry average
• Premier's three-year loss to shareholders was 37% while its EPS was down 16% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Premier, Inc. (NASDAQ:PINC) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 1st of December. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Premier

How Does Total Compensation For Mike Alkire Compare With Other Companies In The Industry?

According to our data, Premier, Inc. has a market capitalization of US$2.5b, and paid its CEO total annual compensation worth US$7.8m over the year to June 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

On comparing similar companies from the American Healthcare industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$6.3m. So it looks like Premier compensates Mike Alkire in line with the median for the industry. Moreover, Mike Alkire also holds US$4.9m worth of Premier 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 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Premier pays a modest slice of remuneration through salary, as compared 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.

A Look at Premier, Inc.'s Growth Numbers

Premier, Inc. has reduced its earnings per share by 16% a year over the last three years. Its revenue is down 2.9% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. 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 Premier, Inc. Been A Good Investment?

Few Premier, Inc. shareholders would feel satisfied with the return of -37% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Premier that investors should think about before committing capital to this stock.

Important note: Premier 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.