Premier, Inc. CEO Faces Potential Shareholder Restraint in Upcoming Fiscal Year

Main Takeaways

• Premier's upcoming AGM is scheduled for December 1st

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• CEO Mike Alkire's salary is £824,318 (converted from US$1.07m)

• Compensation aligns with the industry median

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• Notably, Premier's earnings per share (EPS) dipped by 16% over the past three years, leading to a shareholder loss of 37% during the same period

At Premier, Inc., recent performance metrics may leave shareholders desiring more. The imminent Annual General Meeting on December 1st will give investors a chance to address their concerns, especially regarding executive pay, and to influence the company's strategic decisions moving forward. Here's an explanation on why the CEO's pay may not reflect the company's recent performance curve.

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Our in-depth Premier analysis can be found here.

Evaluating Mike Alkire's Compensation Against Industry Standards

Premier, Inc., with a market capitalization of approximately £1.92 billion (converted from US$2.5b), reported an annual CEO compensation of £6 million (converted from US$7.8m) for the year ending June 2023. This is consistent with the previous year's figure. Given the data, we highlight the importance of overall compensation although it is noteworthy that the CEO's salary is at a lower £847,037 (converted from US$1.1m).

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In the context of the American Healthcare industry, comparable companies with market caps between £1.54 billion and £4.92 billion typically offer a median CEO total compensation of £4.85 million. Premier’s alignment with the industry average and Alkire's significant direct stake in the company valued at £3.77 million justify a degree of personal investment in the company.

Breakdown of CEO Compensation Structure

In the industry, roughly 19% of total compensation is allocated to salary while the remaining 81% encompasses other forms of remuneration. Premier devotes a less significant portion to salary, potentially indicating a direct link between pay and the company's performance.

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Assessing Premier's Performance

The 16% reduction in EPS over the past three years and the 2.9% decline in revenue compared to the previous year paint a bleak picture for Premier, Inc. Such results might not warrant a substantial CEO compensation package under typical circumstances. A look into the company's projected performance through analyst forecasts may shed light on its path ahead.

Shareholder Investment Returns at Premier

The sizable shareholder loss of 37% over three years raises doubts concerning generous payments to the CEO and the company's investment appeal.

Final Thoughts

With Premier's less-than-stellar performance and disappointing investment returns, shareholders may be hesitant to improve the CEO's compensation at the upcoming AGM. The meeting will serve as a platform for management to present their strategy for a turnaround as well as address investor concerns.

It's crucial for investors to monitor CEO pay practices alongside other business performance metrics. In our scrutiny, we have identified 2 warning signs for Premier that warrant consideration before investing. In contrast, for those seeking investments with strong balance sheets and impressive returns, consider exploring this list of high return, low debt companies.