by our performance. Such a comparison also shows the degree of alignment between our stock performance and the level of compensation provided to executives.
The table below compares the compensation values reported in the Summary Compensation Table and the value of realizable pay
(RP) for the compensation awarded during the three-year period 2015 to 2017 for our CEO, Mr. Michels.
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Mr. Michels realizable pay for the three years 20152017 of $15.5 million is 84% higher than his SCT compensation opportunity
for the same period. This shows a strong link between pay and performance as our TSR over the three year period approximated the 75
th
percentile of our peers.
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Pay vs. Other Company Measures of Performance
While TSR is a common measure of performance that is often used to evaluate a companys compensation practices, we consider other
performance measures to be, at times, more reflective of the success of our business. It is important to recognize that our TSR can be extremely volatile, as evidenced by the substantial movements in our stock price during the past several years.
Our TSR can be, and often is, influenced by a variety of macro-economic factors that are outside the control of our executives. Specifically, in 2013 our stock price declined 12%, but rose 61% in 2014. Our stock price declined again by 36.5% in 2015
and rose 36% in 2016. More recently, our stock price rose 114.8% in 2017. These price changes are not solely tied to our underlying financial performance. For example, our stock price declined in 2015 even though we achieved record financial
performance with substantial growth and full year profitability that year. During this period, our stock price was also affected by market factors unrelated to our performance.
As a result, while our executive compensation opportunities do not follow a linear relationship with TSR, the pay realizable to our
executives (as noted above for our CEO) should and does demonstrate a clear relationship with both TSR and financial results. We have tried to align our executive compensation with performance results that are part of our overall business strategy
that we believe will drive stock price improvement and increased value for our stockholders over the longer term. For example, in past years we have had a number of
first-of-their-kind
achievements in the diagnostics field. Specifically, we developed and commercialized the first and only rapid HCV test in the United
States along with the first ever rapid
in-home
HIV test. We successfully completed the acquisition of DNA Genotek in late 2011, providing us with an entrance into the high growth molecular diagnostics field.
This acquisition is now contributing strong growth to our business and accounted for 45% of our 2017 consolidated net revenues. During 2016 and 2017, we expanded the reach of our core HIV and HCV product lines with significant growth in
international markets. These achievements are the primary reasons for our profitability in 2015, 2016 and 2017 and our overall strong and continually improving financial performance for the past three fiscal years.
When establishing and evaluating our executive compensation program generally, and performance-based incentive plans in particular, we
believe that TSR alone will not always immediately account for the value of our accomplishments and, in many cases, it may take time for the impact of our strategic and other accomplishments to
FY2015 - FY2017 Pay Comparison $20,000,000 $15,503,935 $15,000,000 $4,648,636 $10,000,000
$8,426,767 $4,849,264 $1,333,088 $1,890,774 $1,641,826 $5,000,000 $838,697 $4,364,208 $4,364,208 Total Cash + All Other Stock Options Restricted Stock PSUs
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