STERIS (STE)
Sector: Health Care
2026 Annual Meeting Analysis
STERIS · Meeting: July 31, 2026
Directors FOR
9
Directors AGAINST
0
Say on Pay
FOR
Auditor
AGAINST
Director Elections
Resolutions Regarding the Election of Directors
Director since 2023 (within 24 months, exempt from TSR trigger); strong industry qualifications in biopharma and life sciences; all meetings attended; no overboarding, independence, or other flags.
Newly appointed in May 2026, well within the 24-month exemption from the TSR trigger; serves as CEO of bioMérieux bringing relevant healthcare industry expertise; no overboarding or other flags.
Executive director (CEO) since 2021; STE's 3-year price return of +2.7% outperforms the company-disclosed peer group median of -14.0% by +16.7 percentage points, well below the 35pp trigger threshold for low-positive TSR; no TSR underperformance flag applies.
Director since 2005 with deep financial and life sciences audit expertise; serves on one other public board (UFP Technologies), well within limits; STE outperforms peer group median, no TSR trigger; all meetings attended.
Director since 2020; former CFO of C.R. Bard with strong medical device and finance credentials; serves on one other public board (Jabil); STE outperforms peer group median, no TSR trigger; all meetings attended.
Director since 2021; former CIO of Baxter International with relevant healthcare and technology expertise; serves on two other public boards (Unisys, Owens Corning), within the three-board limit; STE outperforms peer group median, no TSR trigger; all meetings attended.
Director since 2018 with extensive public health, clinical operations, and healthcare policy experience; no other public company boards listed; STE outperforms peer group median, no TSR trigger; all meetings attended.
Director since 2025, within the 24-month exemption from the TSR trigger; former CEO of Hospital for Special Surgery brings strong healthcare operational expertise; serves on one other public board (Zimmer Biomet); all meetings attended.
Director since 2005 and Board Chairman; former CEO of Freudenberg SE with deep global industrial and executive leadership experience; serves on two other public boards (Baker Hughes, KION Group), within the three-board limit; STE outperforms peer group median, no TSR trigger; all meetings attended.
All nine director nominees receive a FOR vote. STERIS's 3-year total shareholder return of +2.7% outperforms its disclosed compensation peer group median of -14.0% by +16.7 percentage points, comfortably below the 35-percentage-point underperformance threshold required to trigger a negative vote for low-positive TSR — and also outperforms the IHI (iShares US Medical Devices ETF) benchmark by +9.2 percentage points, well below the 50-point ETF fallback threshold. No overboarding, independence, attendance, or qualification concerns were identified across the slate. Two directors (Alegria and Shapiro) joined within the past 24 months and are exempt from the TSR trigger by policy. The board discloses a comprehensive skills matrix and maintains strong governance practices including annual director elections, independent chairmanship, and clawback policies.
Say on Pay
✓ FORCEO
Daniel A. Carestio
Total Comp
$10,673,062
Prior Support
90.14%%
CEO Daniel Carestio received total compensation of approximately $10.67 million for fiscal 2026, which is in a reasonable range for the CEO of a ~$20 billion market cap healthcare company with record revenues of nearly $6 billion. The pay structure is strongly performance-oriented: the proxy states that 90.3% of total CEO compensation was variable, including a cash bonus tied 100% to pre-set financial metrics (Adjusted EBIT and free cash flow) that paid out at 125.1% of target, and long-term equity delivered as premium-priced stock options (exercisable only above the grant-date price) and time-vested restricted stock. Prior Say on Pay support has consistently exceeded 90%, well above the 70% threshold that would require a response-or-no-vote evaluation. STERIS delivered record financial results in fiscal 2026 and outperformed its disclosed peer group on a 3-year total shareholder return basis, supporting the conclusion that above-target incentive payouts were earned through genuine performance, not structural generosity.
Auditor Ratification
✗ AGAINSTAuditor
Ernst & Young LLP
Tenure
37 yrs
Audit Fees
$5,790,000
Non-Audit Fees
$488,000
Ernst & Young LLP was first retained by the predecessor entity STERIS Corporation in 1989, giving it an auditor tenure of approximately 37 years — well above the 25-year threshold in the voting policy that triggers a negative vote. While the Audit Committee cites institutional knowledge and cost efficiencies, and does rotate the lead audit partner every five years, these measures do not fully substitute for the independence risk that arises from a multi-decade auditor relationship. The non-audit fee ratio is well within acceptable limits (non-audit fees of approximately $488,000 represent only about 8.4% of audit fees of $5,790,000), so that criterion does not apply; however, the tenure trigger alone is sufficient to warrant a negative vote absent a more specific and compelling rationale for continuing this relationship beyond 25 years.
Overall Assessment
The STERIS 2026 annual meeting ballot is largely clean: all nine director nominees receive a FOR vote supported by strong relative stock performance versus both the company's disclosed peer group and the IHI (iShares US Medical Devices ETF) benchmark, and the Say on Pay vote earns support given a strongly performance-linked pay structure, record company results, and consistent shareholder approval above 90%. The one negative vote is on auditor ratification of Ernst & Young LLP, whose relationship with STERIS's predecessor dates to 1989 — a tenure of approximately 37 years that exceeds the policy's 25-year independence threshold, and for which the proxy does not provide a sufficiently specific rationale for continued engagement beyond that threshold.
Compensation Peer Group
16 companies disclosed in 2026 proxy filing