What We Learned About Intuitive Surgical's (NASDAQ:ISRG) CEO Pay
This article will reflect on the compensation paid to Gary Guthart who has served as CEO of Intuitive Surgical, Inc. (NASDAQ:ISRG) since 2010. This analysis will also assess whether Intuitive Surgical pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Intuitive Surgical
How Does Total Compensation For Gary Guthart Compare With Other Companies In The Industry?
Our data indicates that Intuitive Surgical, Inc. has a market capitalization of US$85b, and total annual CEO compensation was reported as US$6.5m for the year to December 2019. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$790k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$10m. That is to say, Gary Guthart is paid under the industry median. What's more, Gary Guthart holds US$283m 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$790k | US$767k | 12% |
Other | US$5.7m | US$5.7m | 88% |
Total Compensation | US$6.5m | US$6.4m | 100% |
Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. It's interesting to note that Intuitive Surgical 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.
Intuitive Surgical, Inc.'s Growth
Over the past three years, Intuitive Surgical, Inc. has seen its earnings per share (EPS) grow by 3.9% per year. In the last year, its revenue is up 1.3%.
We'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Intuitive Surgical, Inc. Been A Good Investment?
We think that the total shareholder return of 78%, over three years, would leave most Intuitive Surgical, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As previously discussed, Gary is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. In contrast, shareholder returns have been excellent over the past three years, and that’s certainly a promising trend to keep an eye on. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.
So you may want to check if insiders are buying Intuitive Surgical shares with their own money (free access).
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.
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