Yahoo Finance Should Shareholders Reconsider Owens & Minor, Inc.'s (NYSE:OMI) CEO Compensation Package?
Key Insights
Owens & Minor's Annual General Meeting to take place on 9th of May
Salary of US$1.00m is part of CEO Ed Pesicka's total remuneration
The overall pay is comparable to the industry average
Over the past three years, Owens & Minor's EPS fell by 81% and over the past three years, the total loss to shareholders 27%
Owens & Minor, Inc. (NYSE:OMI) has not performed well recently and CEO Ed Pesicka will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 9th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
View our latest analysis for Owens & Minor
How Does Total Compensation For Ed Pesicka Compare With Other Companies In The Industry?
According to our data, Owens & Minor, Inc. has a market capitalization of US$1.8b, and paid its CEO total annual compensation worth US$8.4m over the year to December 2023. Notably, that's an increase of 34% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the American Healthcare industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$6.7m. This suggests that Owens & Minor remunerates its CEO largely in line with the industry average. Moreover, Ed Pesicka also holds US$20m worth of Owens & Minor stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$975k | 12% |
Other | US$7.4m | US$5.3m | 88% |
Total Compensation | US$8.4m | US$6.2m | 100% |
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. In Owens & Minor's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Owens & Minor, Inc.'s Growth Numbers
Owens & Minor, Inc. has reduced its earnings per share by 81% a year over the last three years. Its revenue is up 3.8% over the last year.
The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Owens & Minor, Inc. Been A Good Investment?
Given the total shareholder loss of 27% over three years, many shareholders in Owens & Minor, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Owens & Minor that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
