Key Insights

• HealthEquity will host its Annual General Meeting on 27th of June
• Salary of US$700.0k is part of CEO Jon Kessler's total remuneration
• The total compensation is similar to the average for the industry
• HealthEquity's three-year loss to shareholders was 1.2% while its EPS grew by 153% over the past three years

In the past three years, shareholders of HealthEquity, Inc. (NASDAQ:HQY) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 27th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Jon Kessler Compare With Other Companies In The Industry?

Our data indicates that HealthEquity, Inc. has a market capitalization of US$7.4b, and total annual CEO compensation was reported as US$13m for the year to January 2024. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$700k.

On examining similar-sized companies in the American Healthcare industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$11m. This suggests that HealthEquity remunerates its CEO largely in line with the industry average. What's more, Jon Kessler holds US$22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. It's interesting to note that HealthEquity 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.

A Look at HealthEquity, Inc.'s Growth Numbers

HealthEquity, Inc. has seen its earnings per share (EPS) increase by 153% a year over the past three years. It achieved revenue growth of 16% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 HealthEquity, Inc. Been A Good Investment?

Since shareholders would have lost about 1.2% over three years, some HealthEquity, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Shareholders may want to check for free if HealthEquity insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com