Is Zynex, Inc. (NASDAQ:ZYXI) Overpaying Its CEO?

Thomas Sandgaard became the CEO of Zynex, Inc. (NASDAQ:ZYXI) in 1996. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.

View our latest analysis for Zynex

How Does Thomas Sandgaard’s Compensation Compare With Similar Sized Companies?

According to our data, Zynex, Inc. has a market capitalization of US$306m, and paid its CEO total annual compensation worth US$1.1m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$480k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.

Most shareholders would consider it a positive that Thomas Sandgaard takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Zynex has changed from year to year.

NasdaqCM:ZYXI CEO Compensation, September 9th 2019
NasdaqCM:ZYXI CEO Compensation, September 9th 2019

Is Zynex, Inc. Growing?

Over the last three years Zynex, Inc. has grown its earnings per share (EPS) by an average of 79% per year (using a line of best fit). In the last year, its revenue is up 26%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.

Has Zynex, Inc. Been A Good Investment?

Boasting a total shareholder return of 4305% over three years, Zynex, Inc. 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.

In Summary…

Zynex, Inc. is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Thomas Sandgaard deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Zynex.

Important note: Zynex 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.