Yahoo Finance Is ResMed Inc’s (NYSE:RMD) CEO Incentives Align With Yours?
Mick Farrell has been the CEO of ResMed Inc (NYSE:RMD) since 2013. First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for ResMed
How Does Mick Farrell’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that ResMed Inc has a market cap of US$15.2b, and is paying total annual CEO compensation of US$9m. Notably, that’s an increase of 12% over the year before. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m.
So Mick Farrell receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at ResMed has changed from year to year.
Is ResMed Inc Growing?
On average over the last three years, ResMed Inc has shrunk earnings per share by 5.1% each year. It achieved revenue growth of 13% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has ResMed Inc Been A Good Investment?
I think that the total shareholder return of 98%, over three years, would leave most ResMed Inc shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
In Summary…
Mick Farrell is paid around what is normal the leaders of larger companies.
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ResMed Inc (free visualization of insider trades).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
