Yahoo Finance Here's Why Shareholders Will Not Be Complaining About ResMed Inc.'s (NYSE:RMD) CEO Pay Packet
It would be hard to discount the role that CEO Mick Farrell has played in delivering the impressive results at ResMed Inc. (NYSE:RMD) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 17 November 2022. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
View our latest analysis for ResMed
How Does Total Compensation For Mick Farrell Compare With Other Companies In The Industry?
According to our data, ResMed Inc. has a market capitalization of US$31b, and paid its CEO total annual compensation worth US$12m over the year to June 2022. We note that's an increase of 12% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. From this we gather that Mick Farrell is paid around the median for CEOs in the industry. Furthermore, Mick Farrell directly owns US$91m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$1.1m | US$1.1m | 9% |
Other | US$11m | US$9.3m | 91% |
Total Compensation | US$12m | US$10m | 100% |
Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. ResMed pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at ResMed Inc.'s Growth Numbers
Over the past three years, ResMed Inc. has seen its earnings per share (EPS) grow by 22% per year. It achieved revenue growth of 8.2% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has ResMed Inc. Been A Good Investment?
Boasting a total shareholder return of 49% over three years, ResMed Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for ResMed that investors should think about before committing capital to this stock.
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.
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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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