Ron Cooper became the CEO of Albireo Pharma, Inc. (NASDAQ:ALBO) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ron Cooper's Compensation Compare With Similar Sized Companies?
According to our data, Albireo Pharma, Inc. has a market capitalization of US$264m, and paid its CEO total annual compensation worth US$3.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$530k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.1m.
As you can see, Ron Cooper is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Albireo Pharma, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Albireo Pharma, below.
Is Albireo Pharma, Inc. Growing?
Over the last three years Albireo Pharma, Inc. has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). It saw its revenue drop 69% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Albireo Pharma, Inc. Been A Good Investment?
Albireo Pharma, Inc. has not done too badly by shareholders, with a total return of 3.7%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount Albireo Pharma, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Shareholders may want to check for free if Albireo Pharma insiders are buying or selling shares.
Important note: Albireo Pharma may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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