Key Insights

• Elevance Health to hold its Annual General Meeting on 15th of May
• Salary of US$1.60m is part of CEO Gail Boudreaux's total remuneration
• Total compensation is similar to the industry average
• Elevance Health's total shareholder return over the past three years was 42% while its EPS grew by 12% over the past three years

We have been pretty impressed with the performance at Elevance Health, Inc. (NYSE:ELV) recently and CEO Gail Boudreaux deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 15th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

How Does Total Compensation For Gail Boudreaux Compare With Other Companies In The Industry?

At the time of writing, our data shows that Elevance Health, Inc. has a market capitalization of US$125b, and reported total annual CEO compensation of US$22m for the year to December 2023. That's just a smallish increase of 4.6% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.6m.

On comparing similar companies in the American Healthcare industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$17m. From this we gather that Gail Boudreaux is paid around the median for CEOs in the industry. Moreover, Gail Boudreaux also holds US$77m worth of Elevance Health stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Elevance Health pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Elevance Health, Inc.'s Growth Numbers

Over the past three years, Elevance Health, Inc. has seen its earnings per share (EPS) grow by 12% per year. Its revenue is up 6.9% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Elevance Health, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Elevance Health, Inc. for providing a total return of 42% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Elevance Health that you should be aware of before investing.

Important note: Elevance Health 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.

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.