This Is Why Utah Medical Products, Inc.'s (NASDAQ:UTMD) CEO Compensation Looks Appropriate

Simply Wall St

May 1, 2021, 4:43 AM·4 min read

The performance at Utah Medical Products, Inc. (NASDAQ:UTMD) has been rather lacklustre of late and shareholders may be wondering what CEO Kevin Cornwell is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 07 May 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Utah Medical Products

How Does Total Compensation For Kevin Cornwell Compare With Other Companies In The Industry?

At the time of writing, our data shows that Utah Medical Products, Inc. has a market capitalization of US$318m, and reported total annual CEO compensation of US$327k for the year to December 2020. Notably, that's a decrease of 31% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$78k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.0m. Accordingly, Utah Medical Products pays its CEO under the industry median. Furthermore, Kevin Cornwell 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$78k	US$156k	24%
Other	US$249k	US$318k	76%
Total Compensation	US$327k	US$474k	100%

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. It's interesting to note that Utah Medical Products pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Utah Medical Products, Inc.'s Growth Numbers

Over the past three years, Utah Medical Products, Inc. has seen its earnings per share (EPS) grow by 6.4% per year. In the last year, its revenue is down 10%.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Utah Medical Products, Inc. Been A Good Investment?

Since shareholders would have lost about 13% over three years, some Utah Medical Products, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The lack lustre share price performance may have something to do with the flat earnings growth. Shareholders will get the chance to question the board on key concerns and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Utah Medical Products that investors should think about before committing capital to this stock.

Switching gears from Utah Medical Products, 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.

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

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How Does Total Compensation For Kevin Cornwell Compare With Other Companies In The Industry?

A Look at Utah Medical Products, Inc.'s Growth Numbers

Has Utah Medical Products, Inc. Been A Good Investment?

To Conclude...

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