Here's Why Hologic, Inc.'s (NASDAQ:HOLX) CEO Is Unlikely to Expect A Pay Rise This Year
Key Insights
Hologic to hold its Annual General Meeting on 7th of March
CEO Steve MacMillan's total compensation includes salary of US$1.18m
The total compensation is similar to the average for the industry
Hologic's EPS declined by 26% over the past three years while total shareholder return over the past three years was 4.8%
The anaemic share price growth at Hologic, Inc. (NASDAQ:HOLX) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. The upcoming AGM on 7th of March may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
See our latest analysis for Hologic
How Does Total Compensation For Steve MacMillan Compare With Other Companies In The Industry?
Our data indicates that Hologic, Inc. has a market capitalization of US$17b, and total annual CEO compensation was reported as US$16m for the year to September 2023. That's a notable increase of 8.5% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
In comparison with other companies in the American Medical Equipment industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$13m. From this we gather that Steve MacMillan is paid around the median for CEOs in the industry. Furthermore, Steve MacMillan directly owns US$85m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.2m | US$1.1m | 8% |
Other | US$14m | US$13m | 92% |
Total Compensation | US$16m | US$14m | 100% |
Speaking on an industry level, nearly 27% of total compensation represents salary, while the remainder of 73% is other remuneration. In Hologic's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Hologic, Inc.'s Growth
Over the last three years, Hologic, Inc. has shrunk its earnings per share by 26% per year. Its revenue is down 11% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Hologic, Inc. Been A Good Investment?
Hologic, Inc. has not done too badly by shareholders, with a total return of 4.8%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.
In Summary...
The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Hologic that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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.
