Is CryoLife, Inc.'s (NYSE:CRY) CEO Pay Justified?

By
Simply Wall St
Published
March 17, 2020
NYSE:CRY

In 2014 Pat Mackin was appointed CEO of CryoLife, Inc. (NYSE:CRY). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

View our latest analysis for CryoLife

How Does Pat Mackin's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that CryoLife, Inc. has a market cap of US$732m, and reported total annual CEO compensation of US$3.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$660k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$3.2m.

That means Pat Mackin receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at CryoLife has changed over time.

NYSE:CRY CEO Compensation, March 17th 2020
NYSE:CRY CEO Compensation, March 17th 2020

Is CryoLife, Inc. Growing?

CryoLife, Inc. has reduced its earnings per share by an average of 75% a year, over the last three years (measured with a line of best fit). Its revenue is up 5.1% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has CryoLife, Inc. Been A Good Investment?

With a total shareholder return of 13% over three years, CryoLife, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Pat Mackin is paid around the same as most CEOs of similar size companies.

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We do not think the CEO pay is a problem, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. Taking a breather from CEO compensation, we've spotted 2 warning signs for CryoLife (of which 1 makes us a bit uncomfortable!) you should know about in order to have a holistic understanding of the stock.

Important note: CryoLife may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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