Cardiovascular Systems Inc.
David Martin, president and CEO
Total compensation: $4,333,079 for the year ended June 30
Non-equity incentive pay: $866,306
Other compensation: $90,805
Exercised stock options: $566,324
Value realized on vesting shares: $2,309,644
Total fiscal 2013 return to shareholders: 117.0 percent
Note: Martin’s compensation for the year was more than double the previous year’s at New Brighton-based Cardiovascular Systems. He received a salary increase of 7 percent, but most of his additional income came from previously issued stock awards that vested during the year and a big bonus increase.
Martin realized $2.3 million from restricted stock that vested during the year, up from $1.4 million the previous year.
Annual bonuses at Cardiovascular Systems, a medical device company, are based on annual revenue and operating income goals. Martin’s bonus for the year was up more than $800,000, as the company’s revenue rose 26 percent from 2012. The company also recorded an expense of $1,289,020 for new stock awards as part of Martin’s long-term incentive compensation.
According to the company’s proxy, the compensation committee retroactively changed the annual performance goals due to a change in the company’s business plan “in order to avoid penalizing participants in the incentive compensation plan.”
Cardiovascular Systems is pursuing FDA approval to use its technology to treat coronary arteries. An additional equity offering in March that raised $38 million gave it the funding to aggressively pursue the FDA approval and increase spending on sales, marketing and education to achieve those goals. According to a statement from the company e-mailed to the Star Tribune, the revised business plan “made the EBITDA goal set out at the beginning of fiscal 2013 unattainable, but better supported the longer-term growth objectives of the company. As a result, the compensation committee, in consultation with outside advisers, revised the goal to fairly reflect the revised business plan.”