We Discuss Why The CEO Of HealthStream, Inc. (NASDAQ:HSTM) Is Due For A Pay Rise

Key Insights

• HealthStream's Annual General Meeting to take place on 29th of May
• Total pay for CEO Bobby Frist includes US$387.7k salary
• Total compensation is 94% below industry average
• HealthStream's EPS grew by 45% over the past three years while total shareholder return over the past three years was 40%

The impressive results at HealthStream, Inc. (NASDAQ:HSTM) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 29th of May which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

View our latest analysis for HealthStream

Comparing HealthStream, Inc.'s CEO Compensation With The Industry

According to our data, HealthStream, Inc. has a market capitalization of US$862m, and paid its CEO total annual compensation worth US$702k over the year to December 2024. We note that's a small decrease of 3.4% on last year. We note that the salary of US$387.7k makes up a sizeable portion of the total compensation received by the CEO.

On comparing similar companies from the American Healthcare Services industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$11m. That is to say, Bobby Frist is paid under the industry median. Moreover, Bobby Frist also holds US$152m worth of HealthStream stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 41% of total compensation out of all the companies we analyzed, while other remuneration made up 59% of the pie. HealthStream pays out 55% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at HealthStream, Inc.'s Growth Numbers

HealthStream, Inc. has seen its earnings per share (EPS) increase by 45% a year over the past three years. Its revenue is up 3.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 HealthStream, Inc. Been A Good Investment?

We think that the total shareholder return of 40%, over three years, would leave most HealthStream, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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.

So you may want to check if insiders are buying HealthStream shares with their own money (free access).

Switching gears from HealthStream, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.