Shareholders May Be More Conservative With SWK Holdings Corporation's (NASDAQ:SWKH) CEO Compensation For Now

Performance at SWK Holdings Corporation (NASDAQ:SWKH) has been reasonably good and CEO Winston Black has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17 June 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for SWK Holdings

How Does Total Compensation For Winston Black Compare With Other Companies In The Industry?

At the time of writing, our data shows that SWK Holdings Corporation has a market capitalization of US$215m, and reported total annual CEO compensation of US$1.6m for the year to December 2020. Notably, that's an increase of 28% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$283k.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.1m. Accordingly, our analysis reveals that SWK Holdings Corporation pays Winston Black north of the industry median. Moreover, Winston Black also holds US$868k worth of SWK Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 30% of total compensation represents salary and 70% is other remuneration. It's interesting to note that SWK Holdings allocates a smaller portion of compensation to salary 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.

SWK Holdings Corporation's Growth

SWK Holdings Corporation has seen its earnings per share (EPS) increase by 110% a year over the past three years. Its revenue is up 43% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SWK Holdings Corporation Been A Good Investment?

We think that the total shareholder return of 64%, over three years, would leave most SWK Holdings Corporation shareholders smiling. 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

Shareholders may want to check for free if SWK Holdings insiders are buying or selling shares.

Important note: SWK Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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