Shareholders May Not Be So Generous With AngioDynamics, Inc.'s (NASDAQ:ANGO) CEO Compensation And Here's Why

By
Simply Wall St
Published
October 27, 2021
NasdaqGS:ANGO
Source: Shutterstock

Despite strong share price growth of 39% for AngioDynamics, Inc. (NASDAQ:ANGO) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 03 November 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for AngioDynamics

How Does Total Compensation For Jim Clemmer Compare With Other Companies In The Industry?

Our data indicates that AngioDynamics, Inc. has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$4.0m for the year to May 2021. We note that's an increase of 30% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$720k.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$2.7m. Hence, we can conclude that Jim Clemmer is remunerated higher than the industry median. Moreover, Jim Clemmer also holds US$8.2m worth of AngioDynamics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary US$720k US$716k 18%
Other US$3.3m US$2.4m 82%
Total CompensationUS$4.0m US$3.1m100%

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. AngioDynamics sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqGS:ANGO CEO Compensation October 28th 2021

A Look at AngioDynamics, Inc.'s Growth Numbers

Over the last three years, AngioDynamics, Inc. has shrunk its earnings per share by 58% per year. In the last year, its revenue is up 11%.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 AngioDynamics, Inc. Been A Good Investment?

Boasting a total shareholder return of 39% over three years, AngioDynamics, Inc. has done well by shareholders. 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

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. That's why we did some digging and identified 2 warning signs for AngioDynamics that you should be aware of before investing.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.