How Much Does Electromed's (NYSEMKT:ELMD) CEO Make?

Kathleen Skarvan has been the CEO of Electromed, Inc. (NYSEMKT:ELMD) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Electromed pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Electromed

Comparing Electromed, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Electromed, Inc. has a market capitalization of US$78m, and reported total annual CEO compensation of US$748k for the year to June 2020. We note that's a decrease of 14% compared to last year. In particular, the salary of US$410.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$580k. From this we gather that Kathleen Skarvan is paid around the median for CEOs in the industry. Furthermore, Kathleen Skarvan directly owns US$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. Electromed pays out 55% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Electromed, Inc.'s Growth Numbers

Electromed, Inc.'s earnings per share (EPS) grew 22% per year over the last three years. It achieved revenue growth of 3.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Electromed, Inc. Been A Good Investment?

With a total shareholder return of 22% over three years, Electromed, Inc. shareholders would, in general, be reasonably content. 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.

In Summary...

As previously discussed, Kathleen is compensated close to the median for companies of its size, and which belong to the same industry. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Electromed (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from Electromed, 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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