We Take A Look At Whether Teleflex Incorporated's (NYSE:TFX) CEO May Be Underpaid

The solid performance at Teleflex Incorporated (NYSE:TFX) has been impressive and shareholders will probably be pleased to know that CEO Liam Kelly has delivered. At the upcoming AGM on 30 April 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Teleflex

How Does Total Compensation For Liam Kelly Compare With Other Companies In The Industry?

Our data indicates that Teleflex Incorporated has a market capitalization of US$20b, and total annual CEO compensation was reported as US$6.3m for the year to December 2020. We note that's a small decrease of 6.7% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$943k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$10m. In other words, Teleflex pays its CEO lower than the industry median. Furthermore, Liam Kelly directly owns US$6.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$943k	US$869k	15%
Other	US$5.4m	US$5.9m	85%
Total Compensation	US$6.3m	US$6.8m	100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Teleflex sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Teleflex Incorporated's Growth Numbers

Teleflex Incorporated has seen its earnings per share (EPS) increase by 28% a year over the past three years. In the last year, its revenue is down 2.3%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Teleflex Incorporated Been A Good Investment?

Most shareholders would probably be pleased with Teleflex Incorporated for providing a total return of 65% 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.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Teleflex that investors should look into moving forward.

Switching gears from Teleflex, 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.

If you decide to trade Teleflex, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.