Is CareDx, Inc's (NASDAQ:CDNA) CEO Salary Justified?
Peter Maag became the CEO of CareDx, Inc (NASDAQ:CDNA) in 2012. 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.
See our latest analysis for CareDx
How Does Peter Maag's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that CareDx, Inc has a market cap of US$1.5b, and is paying total annual CEO compensation of US$5.2m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$484k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.1m.
So Peter Maag receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at CareDx has changed from year to year.
Is CareDx, Inc Growing?
CareDx, Inc has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 81%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has CareDx, Inc Been A Good Investment?
Most shareholders would probably be pleased with CareDx, Inc for providing a total return of 661% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Remuneration for Peter Maag is close enough to the median pay for a CEO of a similar sized company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if CareDx insiders are buying or selling shares.
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.
