Outset Medical shareholders were nearly split when voting on 2023 compensation for top executives at the company’s recent annual meeting.
Of the shareholders who cast a vote for or against the hemodialysis device maker’s executive compensation packages for the year ended Dec. 31, 2023, about 49% voted against it, according to a recent disclosure filed with the Securities and Exchange Commission.
Excluding abstentions and broker non-votes, the executive pay plan had 16.8 million votes of support and 16.4 million votes in opposition.
Last year, Outset Medical stockholders overwhelmingly approved the compensation of top executives, with 93% of the votes supporting the pay policies.
Because these are advisory votes, they don’t require the board or management to take action and won’t affect executive pay unless the board takes steps on its own. But it’s a way for investors to put the board and top executives on notice.
The company did not immediately respond to request for comment, but we’ll update this post as appropriate if more information is available.
Recruiting and retaining top talent — both at the executive and engineering level — is crucial in the medtech industry, but employee compensation is kept secret in most cases. Medical Design & Outsourcing tracks and analyzes these pay figures when disclosed by major device developers and manufacturers.
2023 analysis: How does medtech CEO pay stack up to the rank and file?
Pay for top Outset Medical executives
Outset Medical President, CEO and Chair Leslie Trigg [Photo courtesy of Outset Medical]
Outset Medical Chief Financial Officer Nabeel Ahmed received $2.3 million, including a $459,521 salary. He received $1.7 million in stock awards and $146,873 in non-equity incentive plan compensation. Ahmed received $6,937 in other compensation.
Outset Medical Chief Technology Officer Jean-Olivier Racine received $1.7 million in total compensation, including a $401,481 salary.
Outset Medical General Counsel and Secretary John Brottem also made $1.7 million, including a $415,208 salary.
The company also disclosed $2.7 million in total compensation to former Chief Commercial Officer Steve Williamson, who left the company in February 2024. In March he became CEO of interventional pulmonology technology developer Pulmonx.
Compensation for all of the top executives increased from the year before. Total compensation increased 57% for Trigg, 43% for Williamson, 33% for Ahmed, 21% for Racine and 14% for Brottem.
How Outset Medical’s CEO pay compares to the median worker
Outset Medical reported total compensation of $164,793 to its median worker, down from $168,058 the year before.
The decrease in that median employee pay figure — along with the increase in Trigg’s compensation as CEO — widened Outset Medical’s CEO pay ratio to 39:1 for 2023, up from 25:1 the year before.
The CEO pay ratio is an SEC-mandated disclosure of what a company pays its CEO compared to its median employee. Outset Medical did not describe its median employee by location or job title. At other medtech companies that offer more details about their median workers than required by the SEC pay disclosure rules, those median medtech workers often hold technical roles such as device design or engineering.
Tough times for Outset Medical
In June 2022, Outset put a hold on shipments of the Tablo hemodialysis system for home use. The hold came as a result of a pending FDA review and clearance of a 510(k) submitted for changes made since the Tablo system’s original March 2020 clearance. By August 2022, the company had received the 510(k) clearance and resumed Tablo shipments.
But more than a year later — in July 2023 — Outset Medical received an FDA warning letter for the Tablo. The FDA said certain materials it reviewed on Outset’s website promote continuous renal replacement therapy (CRRT), which falls outside the current indications for the Tablo hemodialysis system. Outset said it believed it effectively addressed this concern through labeling and promotional changes already underway.
However, analysts opened coverage on Outset Medical earlier this month with significant optimism around future growth for the company.
Just one month ago, the FDA labeled another recall of Outset Medical’s Tablo hemodialysis systems as Class I, the most serious kind. In the warning letter, the company recommended using alternative machines if any are available. The company recalled the systems after non-dioxin-like polychlorinated biphenyl acids (NDL-PCBAs) leaching was identified at levels above allowable safety limits. Peroxide-cured silicone tubing in the machines’ hydraulics and dialysate lines caused the unsafe NDL-PCBAs levels.
On May 6, the company announced that it would begin selling TabloCarts with Prefiltration again after received FDA 510(k) clearance. With clearance for the new optional accessory for the Tablo hemodialysis system, Outset resumed distribution of TabloCart with Prefiltration.
— Managing Editor Jim Hammerand contributed to this report.
