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What We Learned About AtriCure's (NASDAQ:ATRC) CEO Compensation

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Simply Wall St
·4 min read
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This article will reflect on the compensation paid to Mike Carrel who has served as CEO of AtriCure, Inc. (NASDAQ:ATRC) since 2012. This analysis will also assess whether AtriCure pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for AtriCure

How Does Total Compensation For Mike Carrel Compare With Other Companies In The Industry?

Our data indicates that AtriCure, Inc. has a market capitalization of US$1.8b, and total annual CEO compensation was reported as US$5.8m for the year to December 2019. That's a notable increase of 53% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$740k.

In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$4.8m. This suggests that AtriCure remunerates its CEO largely in line with the industry average. What's more, Mike Carrel holds US$20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$740k

US$714k

13%

Other

US$5.1m

US$3.1m

87%

Total Compensation

US$5.8m

US$3.8m

100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. It's interesting to note that AtriCure allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

AtriCure, Inc.'s Growth

Over the last three years, AtriCure, Inc. has shrunk its earnings per share by 5.5% per year. It saw its revenue drop 1.8% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 AtriCure, Inc. Been A Good Investment?

Most shareholders would probably be pleased with AtriCure, Inc. for providing a total return of 73% 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...

As we noted earlier, AtriCure pays its CEO in line with similar-sized companies belonging to the same industry. Some investors may take issue with this, especially considering shrinking EPS for the past three years. But on the bright side, shareholder returns have moved northward during the same period. We're not saying CEO compensation is too generous, but shrinking EPS is undoubtedly an issue that will have to be addressed.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for AtriCure that investors should be aware of in a dynamic business environment.

Important note: AtriCure 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.

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