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Despite strong share price growth of 39% for AngioDynamics, Inc. (NASDAQ:ANGO) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 03 November 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
How Does Total Compensation For Jim Clemmer Compare With Other Companies In The Industry?
Our data indicates that AngioDynamics, Inc. has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$4.0m for the year to May 2021. Notably, that's an increase of 30% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$720k.
On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$2.7m. This suggests that Jim Clemmer is paid more than the median for the industry. Furthermore, Jim Clemmer directly owns US$8.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. AngioDynamics sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
AngioDynamics, Inc.'s Growth
AngioDynamics, Inc. has reduced its earnings per share by 58% a year over the last three years. In the last year, its revenue is up 11%.
Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 AngioDynamics, Inc. Been A Good Investment?
Most shareholders would probably be pleased with AngioDynamics, Inc. for providing a total return of 39% over three years. 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.
While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for AngioDynamics that investors should look into moving forward.
Switching gears from AngioDynamics, 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.
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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