This article will reflect on the compensation paid to Mike Carrel who has served as CEO of AtriCure, Inc. (NASDAQ:ATRC) since 2012. This analysis will also assess whether AtriCure pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Mike Carrel Compare With Other Companies In The Industry?
According to our data, AtriCure, Inc. has a market capitalization of US$2.6b, and paid its CEO total annual compensation worth US$5.8m over the year to December 2019. That's a notable increase of 53% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$740k.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.4m. This suggests that AtriCure remunerates its CEO largely in line with the industry average. Furthermore, Mike Carrel directly owns US$29m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. It's interesting to note that AtriCure allocates a smaller portion of compensation to salary 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 AtriCure, Inc.'s Growth Numbers
Over the last three years, AtriCure, Inc. has shrunk its earnings per share by 14% per year. Its revenue is down 5.5% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 AtriCure, Inc. Been A Good Investment?
We think that the total shareholder return of 216%, over three years, would leave most AtriCure, Inc. shareholders smiling. 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.
As we touched on above, AtriCure, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Some investors may take issue with this, especially considering shrinking EPS for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We're not saying CEO compensation is too generous, but shareholders might think performance needs to be improved before paying any more.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for AtriCure that investors should look into moving forward.
Important note: AtriCure is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
If you’re looking to trade AtriCure, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
Valuation is complex, but we're helping make it simple.
Find out whether AtriCure is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
AtriCure, Inc. develops, manufactures, and sells devices for the surgical ablation of cardiac tissue and systems, and intercostal nerves to medical centers in the United States, Europe, Asia, and internationally.
Excellent balance sheet and slightly overvalued.