Shareholders Will Probably Hold Off On Increasing Stryker Corporation's (NYSE:SYK) CEO Compensation For The Time Being

Key Insights

• Stryker will host its Annual General Meeting on 9th of May

• Total pay for CEO Kevin Lobo includes US$1.39m salary

• The total compensation is 50% higher than the average for the industry

• Stryker's total shareholder return over the past three years was 33% while its EPS grew by 33% over the past three years

Under the guidance of CEO Kevin Lobo, Stryker Corporation (NYSE:SYK) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 9th of May. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Stryker

Comparing Stryker Corporation's CEO Compensation With The Industry

According to our data, Stryker Corporation has a market capitalization of US$124b, and paid its CEO total annual compensation worth US$21m over the year to December 2023. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.4m.

For comparison, other companies in the American Medical Equipment industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$14m. This suggests that Kevin Lobo is paid more than the median for the industry. Moreover, Kevin Lobo also holds US$33m worth of Stryker stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 25% of total compensation represents salary and 75% is other remuneration. Stryker sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Stryker Corporation's Growth Numbers

Over the past three years, Stryker Corporation has seen its earnings per share (EPS) grow by 33% per year. In the last year, its revenue is up 11%.

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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Stryker Corporation Been A Good Investment?

Boasting a total shareholder return of 33% over three years, Stryker Corporation has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

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. We did our research and spotted 2 warning signs for Stryker that investors should look into moving forward.

Important note: Stryker is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.