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Shareholders may be wondering what CEO Vivek Jain plans to do to improve the less than great performance at ICU Medical, Inc. (NASDAQ:ICUI) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 11 May 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.
See our latest analysis for ICU Medical
Comparing ICU Medical, Inc.'s CEO Compensation With the industry
According to our data, ICU Medical, Inc. has a market capitalization of US$4.4b, and paid its CEO total annual compensation worth US$3.3m over the year to December 2020. That's a notable increase of 17% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$650k.
On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.0m. Accordingly, ICU Medical pays its CEO under the industry median. What's more, Vivek Jain holds US$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$650k | US$650k | 20% |
| Other | US$2.7m | US$2.2m | 80% |
| Total Compensation | US$3.3m | US$2.8m | 100% |
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. ICU Medical is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
ICU Medical, Inc.'s Growth
ICU Medical, Inc.'s earnings per share (EPS) grew 5.9% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.
We'd prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 ICU Medical, Inc. Been A Good Investment?
With a three year total loss of 20% for the shareholders, ICU Medical, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.