John Nicols became the CEO of Codexis, Inc. (NASDAQ:CDXS) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does John Nicols's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Codexis, Inc. has a market cap of US$856m, and reported total annual CEO compensation of US$3.4m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$647k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
That means John Nicols receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Codexis, below.
Is Codexis, Inc. Growing?
Codexis, Inc. has reduced its earnings per share by an average of 9.6% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 2.7% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Codexis, Inc. Been A Good Investment?
I think that the total shareholder return of 243%, over three years, would leave most Codexis, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
John Nicols is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Shareholders may want to check for free if Codexis 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.
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