Most Shareholders Will Probably Find That The CEO Compensation For Apyx Medical Corporation (NASDAQ:APYX) Is Reasonable

The share price of Apyx Medical Corporation (NASDAQ:APYX) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 06 August 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. 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.

See our latest analysis for Apyx Medical

Comparing Apyx Medical Corporation's CEO Compensation With the industry

According to our data, Apyx Medical Corporation has a market capitalization of US$309m, and paid its CEO total annual compensation worth US$1.8m over the year to December 2020. We note that's a small decrease of 5.8% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$450k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.7m. From this we gather that Charlie Goodwin is paid around the median for CEOs in the industry. Furthermore, Charlie Goodwin directly owns US$254k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$450k	US$450k	25%
Other	US$1.4m	US$1.5m	75%
Total Compensation	US$1.8m	US$1.9m	100%

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. There isn't a significant difference between Apyx Medical and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Apyx Medical Corporation's Growth

Apyx Medical Corporation has reduced its earnings per share by 6.2% a year over the last three years. Its revenue is up 14% over the last year.

Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Apyx Medical Corporation Been A Good Investment?

Boasting a total shareholder return of 82% over three years, Apyx Medical Corporation has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Apyx Medical that investors should think about before committing capital to this stock.

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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