There Could Be A Chance Globus Medical, Inc.'s (NYSE:GMED) CEO Will Have Their Compensation Increased
Shareholders will be pleased by the robust performance of Globus Medical, Inc. (NYSE:GMED) recently and this will be kept in mind in the upcoming AGM on 03 June 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
Check out our latest analysis for Globus Medical
How Does Total Compensation For Dave Demski Compare With Other Companies In The Industry?
According to our data, Globus Medical, Inc. has a market capitalization of US$7.2b, and paid its CEO total annual compensation worth US$4.0m over the year to December 2020. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$484k.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$5.8m. Accordingly, Globus Medical pays its CEO under the industry median.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$484k | US$470k | 12% |
Other | US$3.5m | US$3.0m | 88% |
Total Compensation | US$4.0m | US$3.4m | 100% |
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Globus Medical sets aside a smaller share of compensation for salary, in comparison to the overall 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 Globus Medical, Inc.'s Growth Numbers
Earnings per share at Globus Medical, Inc. are much the same as they were three years ago, albeit with slightly higher. It achieved revenue growth of 4.1% over the last year.
We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Globus Medical, Inc. Been A Good Investment?
Globus Medical, Inc. has served shareholders reasonably well, with a total return of 28% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. 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 is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Globus Medical that investors should look into moving forward.
Important note: Globus Medical 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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