Major medical device companies are now disclosing how much their median employees make — and comparing it to CEO pay.
For the first time, we’re ranking medical device CEO pay and comparisons to the wages earned by their employees as part of our Medtech Big 100 report.
The relatively new disclosure of these CEO pay ratios — which show how many times higher a CEO’s total pay is than their median worker’s pay — has shed new light on the medical device industry’s compensation practices.
These figures are rare public data points on pay in an industry where recruiting and retaining top talent is crucial. At the same time, medtech investors are increasingly scrutinizing executive pay. In recent years, companies like Masimo, Henry Schein and Zimmer Biomet faced pushback from shareholders in advisory “say-on-pay” votes on their executive pay packages.
Due to the wiggle room the SEC gives companies in calculating their median worker’s wage (excluding certain foreign workers, for example), you shouldn’t consider median wages or pay ratios to be equally comparable across different companies. But if you’re a medtech engineer weighing your options in the field, they offer information about prospective employers that’s hard to come by anywhere else.
Methodology
We used total CEO compensation and pay ratios as reported by publicly traded companies in filings with the U.S. Securities and Exchange Commission. Total compensation includes salary and/or bonuses, stock awards, options and all other compensation. Our analysis focused on 51 companies in our Medtech Big 100 list that have filed proxies by July 14.
We included the CEOs of Abbott, 3M and Johnson & Johnson because they have prominent medical device businesses. However, we also included the leaders of the healthcare businesses within those companies if their pay was disclosed: Ashley McEvoy (Johnson & Johnson MedTech worldwide chair), Jeffrey Lavers (3M Health Care interim group president) and Steve Mason (Cardinal Health’s medical segment CEO) run some of the largest medical device divisions in the Big 100.
The SEC gives new companies extra time to file proxies and pay ratio disclosures. As such, new spinoff companies Embecta, GE HealthCare and ZimVie do not yet disclose CEO pay ratios, but they do disclose CEO total compensation.
