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

Key Insights

• Alphatec Holdings will host its Annual General Meeting on 12th of June
• CEO Pat Miles' total compensation includes salary of US$713.3k
• The total compensation is 39% higher than the average for the industry
• Over the past three years, Alphatec Holdings' EPS fell by 5.2% and over the past three years, the total loss to shareholders 31%

In the past three years, the share price of Alphatec Holdings, Inc. (NASDAQ:ATEC) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 12th of June will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Alphatec Holdings

Comparing Alphatec Holdings, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Alphatec Holdings, Inc. has a market capitalization of US$1.3b, and reported total annual CEO compensation of US$9.5m for the year to December 2023. That's a notable increase of 59% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$713k.

In comparison with other companies in the American Medical Equipment industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$6.8m. Accordingly, our analysis reveals that Alphatec Holdings, Inc. pays Pat Miles north of the industry median. Moreover, Pat Miles also holds US$51m worth of Alphatec Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$713k	US$700k	8%
Other	US$8.8m	US$5.2m	92%
Total Compensation	US$9.5m	US$5.9m	100%

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. It's interesting to note that Alphatec Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Alphatec Holdings, Inc.'s Growth Numbers

Over the last three years, Alphatec Holdings, Inc. has shrunk its earnings per share by 5.2% per year. In the last year, its revenue is up 32%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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 Alphatec Holdings, Inc. Been A Good Investment?

Few Alphatec Holdings, Inc. shareholders would feel satisfied with the return of -31% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. 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.

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 did our research and spotted 3 warning signs for Alphatec Holdings that investors should look into moving forward.

Switching gears from Alphatec 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.