Stock Analysis

How Is Abiomed's (NASDAQ:ABMD) CEO Paid Relative To Peers?

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Mike Minogue has been the CEO of Abiomed, Inc. (NASDAQ:ABMD) since 2004, 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 Abiomed.

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How Does Total Compensation For Mike Minogue Compare With Other Companies In The Industry?

At the time of writing, our data shows that Abiomed, Inc. has a market capitalization of US$12b, and reported total annual CEO compensation of US$17m for the year to March 2020. Notably, that's a decrease of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$768k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$10m. Accordingly, our analysis reveals that Abiomed, Inc. pays Mike Minogue north of the industry median. What's more, Mike Minogue holds US$126m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$768k US$753k 5%
Other US$16m US$18m 95%
Total CompensationUS$17m US$19m100%

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Abiomed has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NasdaqGS:ABMD CEO Compensation November 22nd 2020

A Look at Abiomed, Inc.'s Growth Numbers

Over the past three years, Abiomed, Inc. has seen its earnings per share (EPS) grow by 30% per year. Its revenue is down 2.2% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Abiomed, Inc. Been A Good Investment?

Boasting a total shareholder return of 34% over three years, Abiomed, 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.

In Summary...

Abiomed prefers rewarding its CEO through non-salary benefits. As we touched on above, Abiomed, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Mike's performance creates value for the company.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Abiomed (free visualization of insider trades).

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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