How Should Investors Feel About Wright Medical Group N.V.'s (NASDAQ:WMGI) CEO Pay?
In 2011 Bob Palmisano was appointed CEO of Wright Medical Group N.V. (NASDAQ:WMGI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
View our latest analysis for Wright Medical Group
How Does Bob Palmisano's Compensation Compare With Similar Sized Companies?
According to our data, Wright Medical Group N.V. has a market capitalization of US$2.8b, and pays its CEO total annual compensation worth US$6.4m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$957k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.2m.
That means Bob Palmisano receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Wright Medical Group has changed over time.
Is Wright Medical Group N.V. Growing?
On average over the last three years, Wright Medical Group N.V. has grown earnings per share (EPS) by 27% each year (using a line of best fit). In the last year, its revenue is up 13%.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Wright Medical Group N.V. Been A Good Investment?
With a three year total loss of 12%, Wright Medical Group N.V. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Bob Palmisano is paid around the same as most CEOs of similar size companies.
We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Wright Medical Group shares (free trial).
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.
