Why We Think Neuronetics, Inc.'s (NASDAQ:STIM) CEO Compensation Is Not Excessive At All

Key Insights

• Neuronetics' Annual General Meeting to take place on 22nd of May
• Total pay for CEO Keith Sullivan includes US$728.0k salary
• Total compensation is similar to the industry average
• Over the past three years, Neuronetics' EPS grew by 5.3% and over the past three years, the total shareholder return was 82%

Our free stock report includes 5 warning signs investors should be aware of before investing in Neuronetics. Read for free now.

Under the guidance of CEO Keith Sullivan, Neuronetics, Inc. (NASDAQ:STIM) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 22nd of May. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Neuronetics

Comparing Neuronetics, Inc.'s CEO Compensation With The Industry

Our data indicates that Neuronetics, Inc. has a market capitalization of US$283m, and total annual CEO compensation was reported as US$2.4m for the year to December 2024. That's a notable decrease of 19% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$728k.

On examining similar-sized companies in the American Medical Equipment industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$2.5m. From this we gather that Keith Sullivan is paid around the median for CEOs in the industry. Moreover, Keith Sullivan also holds US$4.0m worth of Neuronetics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$728k	US$700k	30%
Other	US$1.7m	US$2.3m	70%
Total Compensation	US$2.4m	US$3.0m	100%

On an industry level, around 25% of total compensation represents salary and 75% is other remuneration. According to our research, Neuronetics has allocated a higher percentage of pay to salary in comparison to the wider 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 Neuronetics, Inc.'s Growth Numbers

Over the past three years, Neuronetics, Inc. has seen its earnings per share (EPS) grow by 5.3% per year. Its revenue is up 22% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Neuronetics, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Neuronetics, Inc. for providing a total return of 82% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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.

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 5 warning signs for Neuronetics (2 make us uncomfortable!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.