Key Insights

• ICU Medical to hold its Annual General Meeting on 15th of May
• Salary of US$775.0k is part of CEO Vivek Jain's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, ICU Medical's EPS fell by 105% and over the past three years, the total loss to shareholders 47%

The results at ICU Medical, Inc. (NASDAQ:ICUI) have been quite disappointing recently and CEO Vivek Jain bears some responsibility for this. At the upcoming AGM on 15th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

How Does Total Compensation For Vivek Jain Compare With Other Companies In The Industry?

At the time of writing, our data shows that ICU Medical, Inc. has a market capitalization of US$2.5b, and reported total annual CEO compensation of US$6.8m for the year to December 2023. Notably, that's an increase of 20% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$775k.

On comparing similar companies from the American Medical Equipment industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$7.8m. So it looks like ICU Medical compensates Vivek Jain in line with the median for the industry. Moreover, Vivek Jain also holds US$19m worth of ICU Medical stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. It's interesting to note that ICU Medical allocates a smaller portion of compensation to salary in comparison 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 ICU Medical, Inc.'s Growth Numbers

Over the last three years, ICU Medical, Inc. has shrunk its earnings per share by 105% per year. It saw its revenue drop 2.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has ICU Medical, Inc. Been A Good Investment?

Few ICU Medical, Inc. shareholders would feel satisfied with the return of -47% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for ICU Medical (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.