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Is Surmodics, Inc.'s (NASDAQ:SRDX) CEO Salary Justified?

Simply Wall St

Gary Maharaj has been the CEO of Surmodics, Inc. (NASDAQ:SRDX) since 2010. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Surmodics

How Does Gary Maharaj's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Surmodics, Inc. has a market cap of US$640m, and is paying total annual CEO compensation of US$2.4m. (This figure is for the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$551k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.

That means Gary Maharaj receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Surmodics, below.

NasdaqGS:SRDX CEO Compensation, September 17th 2019

Is Surmodics, Inc. Growing?

Over the last three years Surmodics, Inc. has shrunk its earnings per share by an average of 95% per year (measured with a line of best fit). It achieved revenue growth of 18% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Surmodics, Inc. Been A Good Investment?

Boasting a total shareholder return of 66% over three years, Surmodics, Inc. has done well by shareholders. 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...

Gary Maharaj is paid around the same as most CEOs of similar size companies.

We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. So you may want to check if insiders are buying Surmodics shares with their own money (free access).

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

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.