Shareholders May Be Wary Of Increasing ICU Medical, Inc.'s (NASDAQ:ICUI) CEO Compensation Package

Key Insights

• ICU Medical will host its Annual General Meeting on 15th of May
• Total pay for CEO Vivek Jain includes US$775.0k salary
• Total compensation is similar to the industry average
• Over the past three years, ICU Medical's EPS fell by 105% and over the past three years, the total loss to shareholders 47%

Shareholders will probably not be too impressed with the underwhelming results at ICU Medical, Inc. (NASDAQ:ICUI) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 15th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for ICU Medical

How Does Total Compensation For Vivek Jain Compare With Other Companies In The Industry?

At the time of writing, our data shows that ICU Medical, Inc. has a market capitalization of US$2.5b, and reported total annual CEO compensation of US$6.8m for the year to December 2023. That's a notable increase of 20% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$775k.

In comparison with other companies in the American Medical Equipment industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$7.8m. This suggests that ICU Medical remunerates its CEO largely in line with the industry average. What's more, Vivek Jain holds US$19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$775k	US$756k	11%
Other	US$6.0m	US$4.9m	89%
Total Compensation	US$6.8m	US$5.7m	100%

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. ICU Medical pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ICU Medical, Inc.'s Growth

Over the last three years, ICU Medical, Inc. has shrunk its earnings per share by 105% per year. In the last year, its revenue is down 2.1%.

Overall this is not a very positive result for shareholders. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ICU Medical, Inc. Been A Good Investment?

Few ICU Medical, Inc. shareholders would feel satisfied with the return of -47% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for ICU Medical (1 shouldn't be ignored!) that you should be aware of before investing here.

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. 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.