We have been pretty impressed with the performance at Edwards Lifesciences Corporation (NYSE:EW) recently and CEO Mike Mussallem deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 04 May 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Comparing Edwards Lifesciences Corporation's CEO Compensation With the industry
At the time of writing, our data shows that Edwards Lifesciences Corporation has a market capitalization of US$60b, and reported total annual CEO compensation of US$10m for the year to December 2020. That's a notable decrease of 13% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$10m. This suggests that Edwards Lifesciences remunerates its CEO largely in line with the industry average. Furthermore, Mike Mussallem directly owns US$336m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. It's interesting to note that Edwards Lifesciences allocates a smaller portion of compensation to salary 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.
Edwards Lifesciences Corporation's Growth
Edwards Lifesciences Corporation's earnings per share (EPS) grew 16% per year over the last three years. Revenue was pretty flat on last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Edwards Lifesciences Corporation Been A Good Investment?
We think that the total shareholder return of 118%, over three years, would leave most Edwards Lifesciences Corporation 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.
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.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Edwards Lifesciences that investors should be aware of in a dynamic business environment.
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.
When trading Edwards Lifesciences or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.