In 2017 Sujal Shah was appointed CEO of CymaBay Therapeutics, Inc. (NASDAQ:CBAY). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Sujal Shah's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that CymaBay Therapeutics, Inc. has a market cap of US$341m, and reported total annual CEO compensation of US$1.9m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$452k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.8m.
So Sujal Shah receives a similar amount to the median CEO pay, amongst the companies we looked at. 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 CymaBay Therapeutics, below.
Is CymaBay Therapeutics, Inc. Growing?
On average over the last three years, CymaBay Therapeutics, Inc. has shrunk earnings per share by 6.0% each year (measured with a line of best fit). In the last year, its revenue is up 8.6%.
Unfortunately, earnings per share have trended lower over the last 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has CymaBay Therapeutics, Inc. Been A Good Investment?
I think that the total shareholder return of 257%, over three years, would leave most CymaBay Therapeutics, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Sujal Shah is paid around the same as most CEOs of similar size companies.
We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Whatever your view on compensation, you might want to check if insiders are buying or selling CymaBay Therapeutics shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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