Robert Blum became the CEO of Cytokinetics, Incorporated (NASDAQ:CYTK) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Cytokinetics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Robert Blum Compare With Other Companies In The Industry?
At the time of writing, our data shows that Cytokinetics, Incorporated has a market capitalization of US$1.1b, and reported total annual CEO compensation of US$3.5m for the year to December 2019. That's a modest increase of 6.4% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$656k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.7m. From this we gather that Robert Blum is paid around the median for CEOs in the industry. What's more, Robert Blum holds US$3.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Cytokinetics pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Cytokinetics, Incorporated's Growth Numbers
Over the last three years, Cytokinetics, Incorporated has shrunk its earnings per share by 11% per year. Its revenue is down 47% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Cytokinetics, Incorporated Been A Good Investment?
Cytokinetics, Incorporated has served shareholders reasonably well, with a total return of 23% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
As previously discussed, Robert is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, Cytokinetics is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Cytokinetics you should be aware of, and 1 of them shouldn't be ignored.
Switching gears from Cytokinetics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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