Yahoo Finance How Much Is Inovalon Holdings, Inc. (NASDAQ:INOV) Paying Its CEO?
Keith Dunleavy has been the CEO of Inovalon Holdings, Inc. (NASDAQ:INOV) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Inovalon Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Inovalon Holdings
How Does Total Compensation For Keith Dunleavy Compare With Other Companies In The Industry?
At the time of writing, our data shows that Inovalon Holdings, Inc. has a market capitalization of US$4.1b, and reported total annual CEO compensation of US$211k for the year to December 2019. This means that the compensation hasn't changed much from last year. In particular, the salary of US$205.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$4.2m. This suggests that Keith Dunleavy is paid below the industry median. Furthermore, Keith Dunleavy directly owns US$16m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$205k | US$205k | 97% |
Other | US$5.6k | US$5.3k | 3% |
Total Compensation | US$211k | US$210k | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. Inovalon Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Inovalon Holdings, Inc.'s Growth Numbers
Over the last three years, Inovalon Holdings, Inc. has shrunk its earnings per share by 13% per year. It achieved revenue growth of 12% over the last year.
Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. 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 Inovalon Holdings, Inc. Been A Good Investment?
We think that the total shareholder return of 62%, over three years, would leave most Inovalon Holdings, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Inovalon Holdings pays its CEO a majority of compensation through a salary. As we touched on above, Inovalon Holdings, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. And while EPS growth is negative, shareholder returns have been healthy recently. We would like to see EPS growth, but in our view CEO compensation is modest.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Inovalon Holdings (1 is a bit concerning!) that you should be aware of before investing here.
Important note: Inovalon Holdings 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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