We Discuss Why Treace Medical Concepts, Inc.'s (NASDAQ:TMCI) CEO Compensation May Be Closely Reviewed

Key Insights

• Treace Medical Concepts will host its Annual General Meeting on 20th of May
• CEO John Treace's total compensation includes salary of US$723.4k
• The overall pay is 89% above the industry average
• Over the past three years, Treace Medical Concepts' EPS fell by 12% and over the past three years, the total loss to shareholders 51%

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The results at Treace Medical Concepts, Inc. (NASDAQ:TMCI) have been quite disappointing recently and CEO John Treace bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Treace Medical Concepts

How Does Total Compensation For John Treace Compare With Other Companies In The Industry?

According to our data, Treace Medical Concepts, Inc. has a market capitalization of US$429m, and paid its CEO total annual compensation worth US$6.6m over the year to December 2024. That's a notable decrease of 22% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$723k.

In comparison with other companies in the American Medical Equipment industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$3.5m. This suggests that John Treace is paid more than the median for the industry. Furthermore, John Treace directly owns US$84m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$723k	US$684k	11%
Other	US$5.9m	US$7.7m	89%
Total Compensation	US$6.6m	US$8.4m	100%

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. In Treace Medical Concepts' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Treace Medical Concepts, Inc.'s Growth

Over the last three years, Treace Medical Concepts, Inc. has shrunk its earnings per share by 12% per year. It achieved revenue growth of 7.5% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Treace Medical Concepts, Inc. Been A Good Investment?

The return of -51% over three years would not have pleased Treace Medical Concepts, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Treace Medical Concepts that you should be aware of before investing.

Switching gears from Treace Medical Concepts, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.