Intuitive Surgical, Inc.'s (NASDAQ:ISRG) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Intuitive Surgical will host its Annual General Meeting on 25th of April
• Total pay for CEO Gary Guthart includes US$955.0k salary
• Total compensation is similar to the industry average
• Over the past three years, Intuitive Surgical's EPS grew by 19% and over the past three years, the total shareholder return was 30%

Performance at Intuitive Surgical, Inc. (NASDAQ:ISRG) has been reasonably good and CEO Gary Guthart has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 25th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Intuitive Surgical

Comparing Intuitive Surgical, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Intuitive Surgical, Inc. has a market capitalization of US$132b, and reported total annual CEO compensation of US$12m for the year to December 2023. We note that's an increase of 20% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$955k.

In comparison with other companies in the American Medical Equipment industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$14m. So it looks like Intuitive Surgical compensates Gary Guthart in line with the median for the industry. Moreover, Gary Guthart also holds US$475m worth of Intuitive Surgical 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$955k	US$873k	8%
Other	US$11m	US$9.5m	92%
Total Compensation	US$12m	US$10m	100%

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Intuitive Surgical 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.

A Look at Intuitive Surgical, Inc.'s Growth Numbers

Intuitive Surgical, Inc. has seen its earnings per share (EPS) increase by 19% a year over the past three years. It achieved revenue growth of 14% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Intuitive Surgical, Inc. Been A Good Investment?

Intuitive Surgical, Inc. has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

Shareholders may want to check for free if Intuitive Surgical insiders are buying or selling shares.

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.