DEF: ResMed's 2025 Proxy: Strong Growth, AI, and Board Refresh

Sentiment:

Proxy Statement 2 October 2025 2:10 PM

ResMed reports strong fiscal year 2025 financial performance, driven by innovation and digital health expansion, while proposing key governance updates and board changes.

Better than expectedReported double-digit revenue growth of 10% and diluted EPS growth of 37% (GAAP) for fiscal year 2025.Achieved significant increases in GAAP operating income (28%) and net income (37%).Generated a substantial $1.7 billion in free cash flow.NYSE Total Stockholder Return (TSR) for the one-year period ended June 30, 2025, was 34%, placing it at the 99th percentile compared to its US peer group median of -11%.Approved a 13% increase in the quarterly dividend to $0.60 per share for FY2026 and expanded the share repurchase program to $150 million per quarter.

Summary

ResMed achieved double-digit revenue and EPS growth in fiscal year 2025, with revenue reaching $5.1 billion and diluted EPS at $9.51 (GAAP).
Operating income increased by 28% GAAP to $1,685.4 million, and net income rose by 37% GAAP to $1,400.7 million.
The company generated over $1.7 billion in free cash flow, enabling investments and shareholder returns.
Digital health initiatives impacted 154 million lives, with 30 million cloud-connectable devices sold, 33 million patients on AirView, and 10.3 million myAir users.
ResMed plans to increase its quarterly dividend by 13% to $0.60 per share for fiscal year 2026 and expand its share repurchase program to approximately $150 million per quarter.
The board proposes the election of 11 directors, ratification of KPMG LLP as the independent auditor, an advisory vote on executive compensation, and amendments to the 2009 Incentive Award Plan and 2018 Employee Stock Purchase Plan to increase reserved shares and eliminate fixed terms.
Strategic focus includes expanding access through awareness, technology, and physician engagement, turning data into insights for better patient outcomes, and scaling impact to strengthen partnerships across the healthcare ecosystem.
The board has been refreshed with new members, Nicole Mowad-Nassar and Christopher DelOrefice, bringing deep financial and pharmaceutical industry expertise, while Richard Sulpizio will retire.

Sentiment

Score: 8

Explanation: The company demonstrated robust financial performance in FY2025 with double-digit revenue and EPS growth, strong free cash flow, and expanding margins, despite a challenging market. Strategic investments in digital health, AI, and targeted acquisitions position it for future growth. Shareholder returns are being enhanced through increased dividends and an expanded share repurchase program. The company's NYSE TSR significantly outperformed its US peer group over the past year. Proactive corporate governance and board refreshment further strengthen investor confidence. While industry challenges exist, the company's execution and strategic initiatives suggest continued strong performance.

Positives

Achieved double-digit revenue and EPS growth in fiscal year 2025, demonstrating strong financial and operating performance.
Generated over $1.7 billion in free cash flow, providing substantial capital for business investment and shareholder returns.
Expanded digital health technology leadership, reaching 154 million lives and increasing cloud-connectable devices to over 30 million.
Launched new mask innovations (AirTouch N30i, AirFit F40) and expanded access to AirSense 11 and AirCurve 11 platforms globally.
Embedded generative AI tools across R&D, operations, and product design, including the customer-facing Dawn sleep health assistant.
Strengthened relationships with physicians, with over 20,000 unique primary care physicians completing CME programs and 75% planning clinical practice changes.
Increased quarterly dividend by 13% to $0.60 per share for fiscal year 2026 and announced plans to increase share buybacks to $150 million per quarter.
NYSE Total Stockholder Return (TSR) was at the 99th percentile for the one-year period compared to its US peer group.
Refreshed the board with new members possessing deep financial and pharmaceutical industry expertise, enhancing governance capabilities.

Negatives

Operated in a challenging environment marked by persistent diagnostic bottlenecks, trade disruption, and the emergence of new pharmaceutical treatments for obstructive sleep apnea and obesity.
Absolute TSR PSUs granted in November 2020 (fiscal year 2021) were forfeited after the four-year performance period, indicating a failure to meet long-term absolute TSR goals for that specific grant.
Absolute TSR PSUs for fiscal years 2022, 2023, and 2025 are currently tracking to no payout based on the June 30, 2025 stock price.
Say-on-pay support slightly decreased to 84% in 2024 from a historical average of 90%, attributed to differences in US and Australian compensation philosophies and increased Australian ownership.

Risks

Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially.
Competitive and operational challenges, including the response to competitor recalls and uncertainty associated with new weight loss medications for OSA.
Macroeconomic volatility and trade disruption can pressure logistics and sourcing.
Potential dilutive impact on stockholder equity from the proposed increase in shares for the 2009 Incentive Award Plan and 2018 Employee Stock Purchase Plan.
Compliance with global healthcare laws and regulations, privacy requirements, and quality issues.
Cybersecurity threats and the risk of information security breaches.
The effectiveness of the deferred compensation plan and other equity awards may be impacted by Section 409A and Section 457A of the Code.

Future Outlook

The company is focused on delivering the next phase of its 2030 strategy, which involves expanding access through awareness, technology, and physician engagement. This includes turning data into insights for better patient outcomes and scaling impact to strengthen partnerships with all customer groups: consumers, patients, physicians, providers, payers, and private and public healthcare delivery ecosystems.

Management Comments

Our 2030 mission is bold: we have a goal to help 500 million people live healthier, higher-quality lives with better sleep health, breathing health, and with world-class healthcare technology delivered right in their own home.
Resmed has demonstrated that we are a compelling investment for our shareholders.
Artificial intelligence is transforming how we operate.
We have a lot of runway left to educate PCPs and expand the funnel for the 1 billion people who suffer from sleep apnea worldwide.
We remained very disciplined in how we invest in R&D innovation and how we grow our SG&A investments.
I am confident that you will agree that they are excellent stewards of Resmeds strategy, people, and culture.

Industry Context

ResMed is deepening its leadership in sleep and breathing health while building infrastructure for scalable, personalized healthcare delivery. The company continues to see strong demand for its core sleep apnea therapies and increased engagement across its digital platforms. It is actively addressing the global prevalence of sleep apnea, affecting 1 billion people, and navigating the market impact of new GLP-1 drugs for obesity with obstructive sleep apnea. The company is leveraging artificial intelligence across its operations, R&D, and customer-facing solutions, aligning with broader industry trends towards digital health and home-based care to improve quality of life and reduce healthcare costs.

Comparison to Industry Standards

ResMed's NYSE Total Stockholder Return (TSR) of 34% for the one-year period ended June 30, 2025, significantly outperformed the S&P 500's 14% and its US peer group median of -11%.
Over a five-year period ended June 30, 2025, ResMed's NYSE TSR of 7% was at the 67th percentile compared to its US peer group median of 2%, though it lagged the S&P 500's 15%.
The company's executive compensation program is designed to be competitive with similarly-sized US-based public companies in the medical device and medical technology industries, aiming for near the median of its US peer group.
The updated Compensation Recovery Policy (Clawback) aligns with strong US corporate governance standards under SEC Rule 10D and leading governance organizations in Australia, mandating recovery of incentive-based compensation in financial restatements even without misconduct.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Director		Nicole Mowad-Nassar	August 15, 2025	Elected to the board to bring deep financial expertise from large-cap medtech and 30 years of experience in big pharma.
Director		Christopher DelOrefice	November 2024	Elected to the board to bring experienced financial executive leadership in medical technology.
Director	Richard Sulpizio		November 19, 2025	Retirement; decided not to stand for re-election, with no disagreement or conflict with the board.
Chief Commercial Officer Residential Care Software	Bobby Ghoshal		August 1, 2025	Resigned to take a position as president and chief operating officer of a non-competitive software company.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Composition	Board expanded to twelve members on August 15, 2025, with the election of Nicole Mowad-Nassar, and will reduce to eleven members following the annual meeting due to Richard Sulpizio's retirement.	August 15, 2025	Enhances board expertise with new financial and pharmaceutical industry perspectives, while maintaining an optimal board size.
Committee Structure and Scope	The former compliance oversight committee's reach was expanded to include global compliance, privacy, quality, and sustainability, and renamed the 'Compliance, Privacy and Quality Committee,' chaired by Harjit Gill.	April 2025	Strengthens oversight of critical areas, reflecting increased complexity and global regulatory environment, and preserves the company's investment in compliance.
Committee Structure and Scope	The scope of the compensation committee was expanded to affirmatively include leadership development and renamed the 'Compensation and Leadership Development Committee,' chaired by Karen Drexler.	Fiscal Year 2025	Emphasizes the value of human capital and focuses on developing leadership skills within the organization.
Committee Leadership Rotation	Leadership of three of the four committees (Nominating & Governance, Audit, Compliance, Privacy & Quality) rotated in 2025 to promote leadership development among board members.	2025	Provides new leadership opportunities, ensures continuity in existing committee membership, and broadens the experience of board members.
Bylaws Amendment	Bylaws updated in August 2025 to incorporate best practices from the United States and Australia, including proxy access for long-term stockholders, allowing stockholders to call special meetings, requiring annual director elections, and enabling stockholder override of board-adopted bylaw amendments.	August 2025	Reinforces transparency, accountability, and investor rights in a dual trading approach, respecting governance expectations across both jurisdictions.
Compensation Recovery Policy	Updated Compensation Recovery Policy (Clawback), effective October 2, 2023, mandates the recovery of incentive-based compensation in the event of a financial restatement, even absent misconduct, and prohibits indemnification for clawed-back compensation.	October 2, 2023	Aligns with strong US corporate governance standards and Australian accountability principles, reinforcing pay-for-performance and risk mitigation.
Equity Ownership Guidelines	Maintains robust stock ownership guidelines requiring the CEO to hold stock valued at 600% of salary and other NEOs at 300% of salary, to be met within five years.	Ongoing	Enhances long-term alignment of management and stockholder interests.
Prohibition on Pledging and Hedging	Policy prohibits directors, officers, and other employees from hedging or pledging their ResMed stock.	Ongoing	Mitigates risks associated with speculative trading and ensures direct alignment with stock performance.
Director Deferred Stock Unit Plan	Adopted a director deferred equity plan in August 2024, allowing directors to defer receipt of annual equity awards.	August 2024	Provides tax and retirement planning benefits to directors, consistent with peer market practice, and reflects long-term commitment to the company.

Related Party Transactions

Michael Farrell, the Chairman of the Board and Chief Executive Officer, is the son of Peter Farrell, the Founder and Chairman Emeritus and a non-officer employee.
Compensation for Michael Farrell was approved by the board upon recommendation by the compensation and leadership development committee, without Peter Farrell's participation.
Compensation for Peter Farrell was approved by the independent members of the board, after considering a recommendation from the compensation and leadership development committee made without Michael Farrell's participation.
Peter Farrell receives separate compensation for his director role and his non-officer employee role, including an annual salary of $300,000 as a non-officer employee, plus director compensation.

Stakeholder Impact

Shareholders: Benefit from strong financial performance, increased dividends, expanded share repurchases, and robust corporate governance practices aimed at long-term value creation.
Employees: Benefit from competitive compensation, equity incentive plans (2009 Incentive Award Plan, ESPP), leadership development programs, and health and wellbeing initiatives.
Patients/Consumers: Benefit from innovative products, expanded access to sleep and breathing health therapies, digital diagnostic pathways, and AI-powered tools designed to improve health outcomes and quality of life.
Physicians/Providers: Benefit from strengthened relationships, continuing medical education programs, and digital platforms that streamline patient management and support business growth.
Healthcare Systems/Payers: Benefit from solutions that aim to lower costs, prevent hospitalization, and facilitate a shift towards more proactive, home-based care models.

Next Steps

Deliver the next phase of the 2030 strategy, focusing on expanding access through awareness, technology, and physician engagement.
Continue to turn data into insights and insights into better patient outcomes.
Scale impact to strengthen partnerships with consumers, patients, physicians, providers, payers, and healthcare delivery ecosystems.
Hold the Annual Meeting of Stockholders on November 19, 2025 (US) / November 20, 2025 (AU) to vote on director elections, auditor ratification, executive compensation, and equity plan amendments.
The board will reduce its size to eleven members following the annual meeting.
The Compensation and Leadership Development Committee will expand its oversight to include leadership development programs.
Oversight of the code of business conduct and ethics will transition to the new Compliance, Privacy and Quality Committee in fiscal year 2026.

Key Dates

Date	Description
1989	Company founded.
1995	Company listed on NYSE and ASX.
July 1, 2023	Michael Rider appointed Global General Counsel and Secretary.
October 2, 2023	Effective date of the updated Compensation Recovery Policy (Clawback).
November 16, 2023	Grant date for FY2024 PSUs (Absolute and Relative TSR).
June 30, 2024	Fiscal year end for 2024.
August 2024	Board adopted a director deferred equity plan; committee eliminated payment of company contributions to retirement plans for qualifying termination in connection with a change in control (unless required by local law).
September 3, 2024	Christopher DelOrefice received a prorated equity grant for board service.
November 2024	Annual equity grants to non-executive directors awarded; FY2021 Absolute TSR PSUs forfeited after performance period ended.
November 20, 2024	Grant date for FY2025 RSUs and PSUs.
November 25, 2024	Grant date for FY2025 stock options.
July 1, 2025	Effective date for FY2026 non-executive director retainer increase.
July 31, 2025	Company market capitalization was approximately $40 billion.
August 1, 2025	Bobby Ghoshal resigned from his role as Chief Commercial Officer Residential Care Software.
August 8, 2025	Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC.
August 15, 2025	Board voted to expand board to twelve, elected Nicole Mowad-Nassar as a director, and adopted amendments to the 2009 Incentive Award Plan and 2018 Employee Stock Purchase Plan.
August 18, 2025	Company announced Richard Sulpizio's decision not to stand for re-election, to retire and resign as of November 19, 2025.
August 2025	Board approved a 13% increase to the quarterly dividend to $0.60 per share for fiscal year 2026; committee determined 100% of the November 2024 RSU grants to executive officers had been met.
September 23, 2025	Record date for the Annual Meeting of Stockholders (4:00 p.m. US Eastern Time); closing stock price was $275.61.
October 2, 2025	Expected mailing date for Notice of Internet Availability of Proxy Materials.
November 16, 2025	Internet voting closes for ASX holders (10:00 a.m. Australian Eastern Time).
November 18, 2025	Internet voting closes for NYSE holders (11:59 p.m. US Eastern Time).
November 19, 2025	Annual Meeting of Stockholders (3:00 p.m. US Pacific Time).
November 20, 2025	Annual Meeting of Stockholders (10:00 a.m. Australian Eastern Time).
December 1, 2025	Effective date for annual salary adjustments for executive officers.
June 4, 2026	Deadline for stockholder proposals for 2026 annual meeting (Rule 14a-8).
July 22, 2026	Earliest date for non-proxy access proposals/nominations for 2026 annual meeting.
August 21, 2026	Latest date for non-proxy access proposals/nominations for 2026 annual meeting.
November 15, 2026	End of three-year performance period for FY2024 Relative TSR PSUs and potential acceleration for FY2023 Absolute TSR PSUs.
November 17, 2025	End of four-year performance period for FY2022 Absolute TSR PSUs.
November 19, 2027	End of three-year performance period for FY2025 Relative TSR PSUs.
November 19, 2028	End of four-year performance period for FY2025 Absolute TSR PSUs; original fixed term end for 2018 Employee Stock Purchase Plan (to be eliminated).
September 11, 2027	Original fixed term end for 2009 Incentive Award Plan (to be eliminated).

Recommendation

strong buy

ResMed's fiscal year 2025 results demonstrate exceptional financial health, with double-digit growth in revenue and EPS, coupled with robust free cash flow generation. The company's strategic focus on digital health, AI integration, and targeted acquisitions positions it strongly for future market leadership in sleep and respiratory care. Shareholder returns are being actively managed through increased dividends and an expanded share repurchase program, reflecting confidence in sustained performance. Despite acknowledged industry challenges, ResMed's ability to significantly outperform its US peer group in TSR and its commitment to strong corporate governance make it a highly attractive investment. The proactive measures to address market dynamics and enhance operational efficiency further solidify a 'strong buy' recommendation for long-term investors.

Keywords

ResMed, RMD, Proxy Statement, SEC Filing, Sleep Apnea, COPD, Respiratory Health, Digital Health, Healthcare Technology, Artificial Intelligence, AI, Corporate Governance, Executive Compensation, Stock Options, RSUs, PSUs, Dividends, Share Repurchase, Board of Directors, Financial Performance, Revenue, Net Income, EPS, Free Cash Flow, Medical Devices, SaaS, Residential Care Software, GLP-1, Obesity, FDA, KPMG

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