Yahoo Finance Is Globus Medical, Inc.'s (NYSE:GMED) CEO Overpaid Relative To Its Peers?
Dave Demski has been the CEO of Globus Medical, Inc. (NYSE:GMED) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Globus Medical
How Does Dave Demski's Compensation Compare With Similar Sized Companies?
Our data indicates that Globus Medical, Inc. is worth US$4.2b, and total annual CEO compensation was reported as US$3.4m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$456k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.7m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 22% of total compensation represents salary and 78% is other remuneration. Globus Medical sets aside a smaller share of compensation for salary, in comparison to the overall industry.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at Globus Medical, below.
Is Globus Medical, Inc. Growing?
Over the last three years Globus Medical, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 14% per year (using a line of best fit). In the last year, its revenue is up 10%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Globus Medical, Inc. Been A Good Investment?
Boasting a total shareholder return of 41% over three years, Globus Medical, Inc. has done well by shareholders. 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.
In Summary...
It looks like Globus Medical, Inc. pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Dave Demski deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Moving away from CEO compensation for the moment, we've identified 1 warning sign for Globus Medical that you should be aware of before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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