Penumbra makes mechanical clot removal systems that use algorithms to detect whether the catheter is sucking up clot or blood. [Image courtesy of Penumbra]
Penumbra executives received no bonuses last year despite bringing in over $1 billion in sales in fiscal 2023 (ended Dec. 31, 2023), up 25% from the year before.
Penumbra’s board and the directors on the committee that determines compensation said the device developer generally does not pay executive officers cash bonuses or other cash incentive compensation, instead sticking to a “simple structure for our executive compensation program focused on base salary and equity ownership.”
“We are confident that our streamlined compensation program aligns with our culture of cooperation and that it incentivizes our [top executives] to work for the overall long-term good of the company,” the company said in its most recent executive pay disclosure with the Securities and Exchange Commission.
During his time as CEO, Elsesser “has expressed a preference to the Compensation Committee that his cash compensation be modest so we could invest in other areas of the business,” the company said. “Mr. Elsesser maintained this preference in 2023 and did not receive any new equity grant or any increase in cash compensation.”
Penumbra has said it modestly pays its executives to be able to put more money into innovation at the company. Penumbra spent $84.4 million on R&D last year, making it one of medtech’s biggest R&D spenders. (Watch for our annual Medtech Big 100 report in September — applications are still open — to see how Penumbra ranks by revenue and R&D budget.)
Elsesser also took a salary cut in 2020 “to support our business and workforce in light of the COVID-19 pandemic,” the company said in the filing, noting he still has a lower salary than the $725,000 he was making before the pandemic.
Recruiting and retaining top talent — both at the executive and engineering levels — is crucial in the medtech industry, but employee compensation is usually kept secret. 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 Penumbra executives
Penumbra co-founder, President and CEO Adam Elsesser [Photo courtesy of Penumbra]
Penumbra said Elsesser’s total cash compensation was below the 10th percentile of the company’s competitive market.
Penumbra Chief Financial Officer Maggie Yuen’s total 2023 compensation was $666,043, of which $655,769 was salary. Her salary rose a little over $5,000 from 2022. Also in 2022, Yuen had stock awards of $995,955, bringing her total compensation up to nearly $1.7 million. However, she had no stock options in fiscal 2023.
Penumbra EVP, General Counsel and Secretary Johanna Roberts received $661,890 in total compensation for 2023. Her salary was $655,769, up $5,000 from fiscal 2022. She also had $1.9 million in stock awards in 2022 and none in 2023.
Penumbra Chief Accounting Officer Lambert Shiu received total compensation of $539,939 in 2023, up less than $1,000 from the prior year. His salary was $530,769 and included no stock awards; in 2022 he received $499,096 in stock awards.
The executives named above — except for Shiu — have cash compensation levels at or below the 20th percentile of Penumbra’s competitive market, the company said. Shiu’s total cash compensation level is approximately in the 65th percentile of the competitive market.
Penumbra’s compensation committee reviews base salary levels annually. It can review them more frequently in connection with promotions, changes and responsibility or cost of living increases, according to a regulatory filing. As a result of the reviews the committee approved base salary increases in 2023 for Yuen, Roberts, and Shiu based on their performance, resulting in base salaries of $700,000, $700,000, and $575,000, respectively.
How Penumbra’s CEO pay compares to the median worker
Penumbra reported its median worker having an annual total compensation of $69,585, down from the median pay of $77,926 in 2022.
The pay decrease resulted in the CEO pay ratio ticking up to 9:1, slightly higher than the 8:1 pay ratio last year, which was the narrowest gap of the companies we analyzed.
The CEO pay ratio is an SEC-mandated disclosure of what a company pays its CEO compared to its median employee. Penumbra 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.
Say on pay at Penumbra
Penumbra shareholders approved the compensation of executive officers in a recent advisory vote.
Of the shareholders who voted in the company’s annual meeting on June 5, 93.5% voted to approve the compensation of the named executive officer on an advisory basis.
According to the recent tally of votes, the executive pay plan had 31.2 million votes in support and 2.1 million votes in opposition, excluding abstentions and broker non-votes.
The number of shareholders who favor the compensation package is up from last year, when 86.7% of the votes supported the pay policies.
Because these are advisory votes, they don’t require the board or management to maintain current pay policies. But it’s a way for investors to signal their approval or disapproval to the board and top executives.
— Managing Editor Jim Hammerand contributed to this report.
More medtech compensation analysis for CEOs, top-paid executives and median workers
- Integer discloses executive pay, including separation payments for ex-EVPs
- Outset Medical investors target executive pay after recalls and warning letter
- Intuitive pay increases for executives, drops for median worker — but its top-paid employee wasn’t the CEO
- Pay drops for Medtronic CEO and the median employee; bonus plan changes
- BD limits executive severance after ‘golden parachute’ shareholder proposal overcomes board opposition
- Zimmer Biomet changes executive pay plans after shareholder vote
- Boston Scientific discloses executive pay, reports employment and diversity gains
- Stryker discloses $40M in pay for CEO Kevin Lobo and top execs
It is refreshing to see an instance of a well compensated CEO choosing to support the company rather than grabbing for all they can get.
Of course it seems that the company is indeed doing well, and while the CEO is responsible for the policies, it is certainly others who do the actual work. So it makes a great deal of sense to invest back into the company.
As for the huge givings to top management elsewhere, I always hear the board saying “It’s Not OUR money” as they approve outrageous pay to the single CEO and other top managers.
So really, investing in the company makes a whole lot of sense for a leader planning to stick around for a while, as opposed to a short-timer just waiting for a better offer.