Why We Think CONMED Corporation's (NYSE:CNMD) CEO Compensation Is Not Excessive At All
The share price of CONMED Corporation (NYSE:CNMD) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 19 May 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
Check out our latest analysis for CONMED
How Does Total Compensation For Curt Hartman Compare With Other Companies In The Industry?
According to our data, CONMED Corporation has a market capitalization of US$4.0b, and paid its CEO total annual compensation worth US$6.5m over the year to December 2020. That's just a smallish increase of 4.6% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$888k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.5m. From this we gather that Curt Hartman is paid around the median for CEOs in the industry. Furthermore, Curt Hartman directly owns US$17m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$888k | US$842k | 14% |
Other | US$5.6m | US$5.3m | 86% |
Total Compensation | US$6.5m | US$6.2m | 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. CONMED pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at CONMED Corporation's Growth Numbers
CONMED Corporation has reduced its earnings per share by 43% a year over the last three years. It saw its revenue drop 7.3% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 CONMED Corporation Been A Good Investment?
We think that the total shareholder return of 105%, over three years, would leave most CONMED Corporation 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.
To Conclude...
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for CONMED you should be aware of, and 1 of them is significant.
Switching gears from CONMED, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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