Is Utah Medical Products, Inc.’s (NASDAQ:UTMD) CEO Being Overpaid?

Kevin Cornwell became the CEO of Utah Medical Products, Inc. (NASDAQ:UTMD) in 1992. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Utah Medical Products

How Does Kevin Cornwell’s Compensation Compare With Similar Sized Companies?

Our data indicates that Utah Medical Products, Inc. is worth US$383m, and total annual CEO compensation was reported as US$501k for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$156k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.

A first glance this seems like a real positive for shareholders, since Kevin Cornwell is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

You can see, below, how CEO compensation at Utah Medical Products has changed over time.

NasdaqGS:UTMD CEO Compensation, November 21st 2019
NasdaqGS:UTMD CEO Compensation, November 21st 2019

Is Utah Medical Products, Inc. Growing?

Over the last three years Utah Medical Products, Inc. has grown its earnings per share (EPS) by an average of 11% per year (using a line of best fit). Its revenue is up 5.6% over last year.

This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

Has Utah Medical Products, Inc. Been A Good Investment?

I think that the total shareholder return of 54%, over three years, would leave most Utah Medical Products, Inc. shareholders smiling. 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.

In Summary…

It appears that Utah Medical Products, Inc. remunerates its CEO below most similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Kevin Cornwell deserves a raise! It’s not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Utah Medical Products.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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