Shareholders Will Probably Hold Off On Increasing LogicMark, Inc.'s (NASDAQ:LGMK) CEO Compensation For The Time Being
Key Insights
LogicMark to hold its Annual General Meeting on 20th of December
Salary of US$475.5k is part of CEO Chia-Lin Simmons's total remuneration
The overall pay is 101% above the industry average
LogicMark's EPS grew by 31% over the past three years while total shareholder loss over the past three years was 99%
The underwhelming share price performance of LogicMark, Inc. (NASDAQ:LGMK) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20th of December. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for LogicMark
How Does Total Compensation For Chia-Lin Simmons Compare With Other Companies In The Industry?
According to our data, LogicMark, Inc. has a market capitalization of US$2.1m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2022. We note that's a decrease of 63% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$475k.
For comparison, other companies in the American Medical Equipment industry with market capitalizations below US$200m, reported a median total CEO compensation of US$717k. Hence, we can conclude that Chia-Lin Simmons is remunerated higher than the industry median. Moreover, Chia-Lin Simmons also holds US$84k worth of LogicMark stock directly under their own name.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$475k | US$243k | 33% |
Other | US$965k | US$3.6m | 67% |
Total Compensation | US$1.4m | US$3.9m | 100% |
On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. It's interesting to note that LogicMark pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
LogicMark, Inc.'s Growth
LogicMark, Inc. has seen its earnings per share (EPS) increase by 31% a year over the past three years. Its revenue is down 21% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 LogicMark, Inc. Been A Good Investment?
The return of -99% over three years would not have pleased LogicMark, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 6 warning signs for LogicMark you should be aware of, and 4 of them are significant.
Important note: LogicMark 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.
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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.
