In 1992 Kevin Cornwell was appointed CEO of Utah Medical Products Inc (NASDAQ:UTMD). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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 Kevin Cornwell’s Compensation Compare With Similar Sized Companies?
According to our data, Utah Medical Products Inc has a market capitalization of US$346m, and pays its CEO total annual compensation worth US$501k. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$156k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO compensation was US$1.6m.
Most shareholders would consider it a positive that Kevin Cornwell takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business. Take a look at Utah Medical Products’s growth trajectory by checking out this more detailed historical graph of earnings, revenue and cash flow.
You can see, below, how CEO compensation at Utah Medical Products has changed over time.
Is Utah Medical Products Inc Growing?
Over the last three years Utah Medical Products Inc has shrunk its earnings per share by an average of 5.0% per year. Its revenue is up 5.9% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Utah Medical Products Inc Been A Good Investment?
Boasting a total shareholder return of 68% over three years, Utah Medical Products Inc has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
It looks like Utah Medical Products Inc pays its CEO less than similar sized companies.
It’s well worth noting that while Kevin Cornwell is paid less than most company leaders (at similar sized companies), there isn’t much EPS growth. Having said that, returns to shareholders have been great. Although we could see higher EPS growth, we’d argue the remuneration is not an issue, based on these observations. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Utah Medical Products.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.