Joe Woody became the CEO of Avanos Medical, Inc. (NYSE:AVNS) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Joe Woody's Compensation Compare With Similar Sized Companies?
Our data indicates that Avanos Medical, Inc. is worth US$1.6b, and total annual CEO compensation was reported as US$7.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$905k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.8m.
As you can see, Joe Woody is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Avanos Medical, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Avanos Medical, below.
Is Avanos Medical, Inc. Growing?
Over the last three years Avanos Medical, Inc. has grown its earnings per share (EPS) by an average of 34% per year (using a line of best fit). In the last year, its revenue is up 4.5%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Avanos Medical, Inc. Been A Good Investment?
With a three year total loss of 11%, Avanos Medical, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Avanos Medical, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if Avanos Medical insiders are buying or selling shares.
Important note: Avanos Medical may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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