It Looks Like Shareholders Would Probably Approve Merit Medical Systems, Inc.'s (NASDAQ:MMSI) CEO Compensation Package

Key Insights

• Merit Medical Systems' Annual General Meeting to take place on 15th of May
• Salary of US$1.89m is part of CEO Fred Lampropoulos's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Merit Medical Systems' EPS grew by 184% and over the past three years, the total shareholder return was 34%

It would be hard to discount the role that CEO Fred Lampropoulos has played in delivering the impressive results at Merit Medical Systems, Inc. (NASDAQ:MMSI) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 15th of May. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Merit Medical Systems

Comparing Merit Medical Systems, Inc.'s CEO Compensation With The Industry

Our data indicates that Merit Medical Systems, Inc. has a market capitalization of US$4.7b, and total annual CEO compensation was reported as US$10m for the year to December 2023. Notably, that's an increase of 24% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.9m.

On examining similar-sized companies in the American Medical Equipment industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$7.8m. So it looks like Merit Medical Systems compensates Fred Lampropoulos in line with the median for the industry. Moreover, Fred Lampropoulos also holds US$91m worth of Merit Medical Systems 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$1.9m	US$1.8m	19%
Other	US$8.2m	US$6.3m	81%
Total Compensation	US$10m	US$8.1m	100%

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. Merit Medical Systems sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Merit Medical Systems, Inc.'s Growth

Over the past three years, Merit Medical Systems, Inc. has seen its earnings per share (EPS) grow by 184% per year. It achieved revenue growth of 9.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Merit Medical Systems, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Merit Medical Systems, Inc. for providing a total return of 34% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Merit Medical Systems that investors should be aware of in a dynamic business environment.

Important note: Merit Medical Systems 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.

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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.