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Is Arbutus Biopharma Corporation (NASDAQ:ABUS) Excessively Paying Its CEO?

Simply Wall St

Mark Murray became the CEO of Arbutus Biopharma Corporation (NASDAQ:ABUS) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

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View our latest analysis for Arbutus Biopharma

How Does Mark Murray's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Arbutus Biopharma Corporation has a market cap of US$132m, and is paying total annual CEO compensation of US$2.5m. (This is based on the year to December 2018). We note that's an increase of 32% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$556k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$450k.

It would therefore appear that Arbutus Biopharma Corporation pays Mark Murray more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Arbutus Biopharma, below.

NasdaqGS:ABUS CEO Compensation, May 22nd 2019

Is Arbutus Biopharma Corporation Growing?

On average over the last three years, Arbutus Biopharma Corporation has grown earnings per share (EPS) by 36% each year (using a line of best fit). In the last year, its revenue is down -56%.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.

Has Arbutus Biopharma Corporation Been A Good Investment?

Since shareholders would have lost about 45% over three years, some Arbutus Biopharma Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by Arbutus Biopharma Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. This doesn't look great when you consider CEO remuneration is up on last year. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. So you may want to check if insiders are buying Arbutus Biopharma shares with their own money (free access).

If you want to buy a stock that is better than Arbutus Biopharma, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.