Shareholders May Be More Conservative With SWK Holdings Corporation's (NASDAQ:SWKH) CEO Compensation For Now

Performance at SWK Holdings Corporation (NASDAQ:SWKH) has been reasonably good and CEO Winston Black has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 17 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for SWK Holdings

Comparing SWK Holdings Corporation's CEO Compensation With the industry

At the time of writing, our data shows that SWK Holdings Corporation has a market capitalization of US$215m, and reported total annual CEO compensation of US$1.6m for the year to December 2020. We note that's an increase of 28% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$283k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.1m. This suggests that Winston Black is paid more than the median for the industry. What's more, Winston Black holds US$868k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$283k	US$275k	18%
Other	US$1.3m	US$938k	82%
Total Compensation	US$1.6m	US$1.2m	100%

Speaking on an industry level, nearly 30% of total compensation represents salary, while the remainder of 70% is other remuneration. In SWK Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at SWK Holdings Corporation's Growth Numbers

SWK Holdings Corporation's earnings per share (EPS) grew 110% per year over the last three years. In the last year, its revenue is up 43%.

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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has SWK Holdings Corporation Been A Good Investment?

Most shareholders would probably be pleased with SWK Holdings Corporation for providing a total return of 64% over three years. 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.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

So you may want to check if insiders are buying SWK Holdings shares with their own money (free access).

Switching gears from SWK Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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