It Looks Like The CEO Of Semler Scientific, Inc. (NASDAQ:SMLR) May Be Underpaid Compared To Peers

The impressive results at Semler Scientific, Inc. (NASDAQ:SMLR) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 21 October 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Semler Scientific

How Does Total Compensation For Doug Murphy-Chutorian Compare With Other Companies In The Industry?

Our data indicates that Semler Scientific, Inc. has a market capitalization of US$958m, and total annual CEO compensation was reported as US$722k for the year to December 2020. That's a notable decrease of 38% on last year. Notably, the salary which is US$400.0k, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.8m. Accordingly, Semler Scientific pays its CEO under the industry median. Moreover, Doug Murphy-Chutorian also holds US$3.9m worth of Semler Scientific stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. According to our research, Semler Scientific has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Semler Scientific, Inc.'s Growth Numbers

Semler Scientific, Inc. has seen its earnings per share (EPS) increase by 99% a year over the past three years. It achieved revenue growth of 49% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Semler Scientific, Inc. Been A Good Investment?

We think that the total shareholder return of 294%, over three years, would leave most Semler Scientific, Inc. shareholders smiling. 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.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Semler Scientific (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

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