Pat Mackin became the CEO of CryoLife, Inc. (NYSE:CRY) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether CryoLife pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Pat Mackin Compare With Other Companies In The Industry?
Our data indicates that CryoLife, Inc. has a market capitalization of US$721m, and total annual CEO compensation was reported as US$6.5m for the year to December 2019. Notably, that's an increase of 100% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$689k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.3m. Accordingly, our analysis reveals that CryoLife, Inc. pays Pat Mackin north of the industry median. Furthermore, Pat Mackin directly owns US$4.9m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. In CryoLife's 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.
CryoLife, Inc.'s Growth
Over the last three years, CryoLife, Inc. has shrunk its earnings per share by 77% per year. It achieved revenue growth of 2.5% over the last year.
The decline in earnings is a bit concerning. 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. 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 CryoLife, Inc. Been A Good Investment?
With a total shareholder return of 1.6% over three years, CryoLife, Inc. has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we touched on above, CryoLife, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look great when you realize that the company has been suffering from negative earnings growth for the last three years. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the amount Pat makes is justifiable.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for CryoLife (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from CryoLife, 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.
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.
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