What We Learned About SWK Holdings' (NASDAQ:SWKH) CEO Compensation

Winston Black became the CEO of SWK Holdings Corporation (NASDAQ:SWKH) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether SWK Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for SWK Holdings

Comparing SWK Holdings Corporation's CEO Compensation With the industry

According to our data, SWK Holdings Corporation has a market capitalization of US$182m, and paid its CEO total annual compensation worth US$1.2m over the year to December 2019. Notably, that's an increase of 18% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$275k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.5m. So it looks like SWK Holdings compensates Winston Black in line with the median for the industry. Furthermore, Winston Black directly owns US$740k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. There isn't a significant difference between SWK Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

SWK Holdings Corporation's Growth

Over the last three years, SWK Holdings Corporation has shrunk its earnings per share by 36% per year. It achieved revenue growth of 109% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SWK Holdings Corporation Been A Good Investment?

Most shareholders would probably be pleased with SWK Holdings Corporation for providing a total return of 34% over three years. 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.

To Conclude...

As we noted earlier, SWK Holdings pays its CEO in line with similar-sized companies belonging to the same industry. Investors will be happy that SWK Holdings has produced strong shareholder returns for the past three years. Revenues have also showed some positive momentum, recently. On a sour note, EPS growth has been negative. However, considering overall positive performance, we think Winston, shareholders might not be too worried about the CEO's compensation.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for SWK Holdings that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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