A Look At SWK Holdings' (NASDAQ:SWKH) CEO Remuneration

Winston Black has been the CEO of SWK Holdings Corporation (NASDAQ:SWKH) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for SWK Holdings.

See our latest analysis for SWK Holdings

How Does Total Compensation For Winston Black Compare With Other Companies In The Industry?

At the time of writing, our data shows that SWK Holdings Corporation has a market capitalization of US$179m, and reported total annual CEO compensation of US$1.2m for the year to December 2019. That's a notable increase of 18% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$275k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$600k. This suggests that Winston Black is paid more than the median for the industry. Moreover, Winston Black also holds US$714k worth of SWK Holdings stock directly under their own name.

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. There isn't a significant difference between SWK Holdings and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

SWK Holdings Corporation's Growth

Over the last three years, SWK Holdings Corporation has shrunk its earnings per share by 36% per year. Its revenue is up 23% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 SWK Holdings Corporation Been A Good Investment?

SWK Holdings Corporation has generated a total shareholder return of 27% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, SWK Holdings Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, revenue figures for the company are growing at a nice pace over the last year. Shareholder returns have also grown during this time, but haven't been as impressive. EPS growth, on the other hand, is negative, a concerning trend. But we don't think the high CEO compensation is a huge problem.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for SWK Holdings that investors should be aware of in a dynamic business environment.

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.

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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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