How Does ImpediMed's (ASX:IPD) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Rick Carreon who has served as CEO of ImpediMed Limited (ASX:IPD) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for ImpediMed.

Check out our latest analysis for ImpediMed

How Does Total Compensation For Rick Carreon Compare With Other Companies In The Industry?

According to our data, ImpediMed Limited has a market capitalization of AU$145m, and paid its CEO total annual compensation worth AU$1.1m over the year to June 2020. That's a notable decrease of 54% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$558k.

For comparison, other companies in the industry with market capitalizations below AU$272m, reported a median total CEO compensation of AU$596k. This suggests that Rick Carreon is paid more than the median for the industry. Furthermore, Rick Carreon directly owns AU$474k worth of shares in the company.

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. ImpediMed pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ImpediMed Limited's Growth

Over the past three years, ImpediMed Limited has seen its earnings per share (EPS) grow by 16% per year. Its revenue is up 38% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has ImpediMed Limited Been A Good Investment?

Since shareholders would have lost about 84% over three years, some ImpediMed Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, ImpediMed Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for ImpediMed you should be aware of, and 1 of them is concerning.

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. 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.
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