Key Insights

• Varex Imaging will host its Annual General Meeting on 8th of February
• Total pay for CEO Sunny Sanyal includes US$766.5k salary
• The overall pay is comparable to the industry average
• Varex Imaging's three-year loss to shareholders was 17% while its EPS grew by 100% over the past three years

In the past three years, the share price of Varex Imaging Corporation (NASDAQ:VREX) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 8th of February. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Sunny Sanyal Compare With Other Companies In The Industry?

According to our data, Varex Imaging Corporation has a market capitalization of US$793m, and paid its CEO total annual compensation worth US$4.5m over the year to September 2023. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$766k.

For comparison, other companies in the American Medical Equipment industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$4.3m. So it looks like Varex Imaging compensates Sunny Sanyal in line with the median for the industry. Furthermore, Sunny Sanyal directly owns US$2.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 27% of total compensation represents salary, while the remainder of 73% is other remuneration. Varex Imaging pays a modest slice of remuneration through salary, as compared 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 Varex Imaging Corporation's Growth Numbers

Over the past three years, Varex Imaging Corporation has seen its earnings per share (EPS) grow by 100% per year. In the last year, its revenue is up 4.0%.

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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Varex Imaging Corporation Been A Good Investment?

Since shareholders would have lost about 17% over three years, some Varex Imaging Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Varex Imaging that investors should think about before committing capital to this stock.

Important note: Varex Imaging 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.

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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.