Fred Lampropoulos became the CEO of Merit Medical Systems, Inc. (NASDAQ:MMSI) in 1987. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Fred Lampropoulos's Compensation Compare With Similar Sized Companies?
Our data indicates that Merit Medical Systems, Inc. is worth US$1.7b, and total annual CEO compensation was reported as US$3.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.7m. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.
So Fred Lampropoulos is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Merit Medical Systems has changed from year to year.
Is Merit Medical Systems, Inc. Growing?
On average over the last three years, Merit Medical Systems, Inc. has grown earnings per share (EPS) by 14% each year (using a line of best fit). It achieved revenue growth of 19% over the last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Merit Medical Systems, Inc. Been A Good Investment?
Merit Medical Systems, Inc. has served shareholders reasonably well, with a total return of 30% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Fred Lampropoulos is paid around the same as most CEOs of similar size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Merit Medical Systems (free visualization of insider trades).
Important note: Merit Medical Systems may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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