In 1992 Kevin Cornwell was appointed CEO of Utah Medical Products, Inc. (NASDAQ:UTMD). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kevin Cornwell’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Utah Medical Products, Inc. has a market cap of US$356m, and reported total annual CEO compensation of 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. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO 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. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Utah Medical Products, below.
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 12% per year (using a line of best fit). Its revenue is up 12% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don’t have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Utah Medical Products, Inc. Been A Good Investment?
Boasting a total shareholder return of 55% over three years, Utah Medical Products, 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.
It looks like Utah Medical Products, Inc. pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Kevin Cornwell deserves a raise! It’s not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Utah Medical Products shares (free trial).
Important note: Utah Medical Products may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.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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