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Is Calithera Biosciences, Inc.'s (NASDAQ:CALA) CEO Pay Justified?

Simply Wall St

Susan Molineaux has been the CEO of Calithera Biosciences, Inc. (NASDAQ:CALA) since 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Calithera Biosciences

How Does Susan Molineaux's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Calithera Biosciences, Inc. has a market cap of US$207m, and is paying total annual CEO compensation of US$2.0m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$530k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.2m.

Thus we can conclude that Susan Molineaux receives more in total compensation than the median of a group of companies in the same market, and of similar size to Calithera Biosciences, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Calithera Biosciences has changed over time.

NasdaqGS:CALA CEO Compensation, August 23rd 2019

Is Calithera Biosciences, Inc. Growing?

On average over the last three years, Calithera Biosciences, Inc. has grown earnings per share (EPS) by 4.2% each year (using a line of best fit). In the last year, its revenue has collapsed effectively to zero.

I would prefer it if there was revenue growth, but it is good to see EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Calithera Biosciences, Inc. Been A Good Investment?

Calithera Biosciences, Inc. has served shareholders reasonably well, with a total return of 23% 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.

In Summary...

We compared total CEO remuneration at Calithera Biosciences, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Calithera Biosciences.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.