It Looks Like Surmodics, Inc.'s (NASDAQ:SRDX) CEO May Expect Their Salary To Be Put Under The Microscope
Surmodics, Inc. (NASDAQ:SRDX) has not performed well recently and CEO Gary Maharaj will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 09 February 2023. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for Surmodics
Comparing Surmodics, Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Surmodics, Inc. has a market capitalization of US$421m, and reported total annual CEO compensation of US$3.1m for the year to September 2022. That's a modest increase of 5.4% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$620k.
On examining similar-sized companies in the American Medical Equipment industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$4.4m. From this we gather that Gary Maharaj is paid around the median for CEOs in the industry. Furthermore, Gary Maharaj directly owns US$5.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Surmodics is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Surmodics, Inc.'s Growth
Over the last three years, Surmodics, Inc. has shrunk its earnings per share by 115% per year. In the last year, its revenue is down 4.9%.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Surmodics, Inc. Been A Good Investment?
With a three year total loss of 26% for the shareholders, Surmodics, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
Whatever your view on compensation, you might want to check if insiders are buying or selling Surmodics shares (free trial).
Switching gears from Surmodics, 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.
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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.
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