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Here's Why Shareholders May Want To Be Cautious With Increasing Hologic, Inc.'s (NASDAQ:HOLX) CEO Pay Packet

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Simply Wall St
·3 min read
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Under the guidance of CEO Steve MacMillan, Hologic, Inc. (NASDAQ:HOLX) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 11 March 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Hologic

How Does Total Compensation For Steve MacMillan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hologic, Inc. has a market capitalization of US$18b, and reported total annual CEO compensation of US$14m for the year to September 2020. That's a notable increase of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$10m. This suggests that Steve MacMillan is paid more than the median for the industry. Moreover, Steve MacMillan also holds US$68m worth of Hologic stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$1.1m

US$1.1m

8%

Other

US$13m

US$11m

92%

Total Compensation

US$14m

US$12m

100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. In Hologic's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Hologic, Inc.'s Growth

Hologic, Inc.'s earnings per share (EPS) grew 11% per year over the last three years. Its revenue is up 34% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Hologic, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Hologic, Inc. for providing a total return of 82% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Hologic (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.