What Can We Conclude About Masimo's (NASDAQ:MASI) CEO Pay?

Joe Kiani became the CEO of Masimo Corporation (NASDAQ:MASI) in 1989, 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 Masimo pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Masimo

Comparing Masimo Corporation's CEO Compensation With the industry

Our data indicates that Masimo Corporation has a market capitalization of US$13b, and total annual CEO compensation was reported as US$15m for the year to December 2019. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, 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$9.5m. Hence, we can conclude that Joe Kiani is remunerated higher than the industry median. What's more, Joe Kiani holds US$911m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. It's interesting to note that Masimo allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Masimo Corporation's Growth Numbers

Masimo Corporation has reduced its earnings per share by 15% a year over the last three years. In the last year, its revenue is up 17%.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Masimo Corporation Been A Good Investment?

We think that the total shareholder return of 172%, over three years, would leave most Masimo 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.

To Conclude...

As previously discussed, Joe is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns and revenue growth have been very healthy as we saw before. Importantly though, EPS has not been growing over the same stretch. Considering all the factors, we would have to say CEO pay is fair; however, moving forward, it would be nice to see EPS growth from the company as well.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Masimo that you should be aware of before investing.

Switching gears from Masimo, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.