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Steve Davis has been the CEO of ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Steve Davis's Compensation Compare With Similar Sized Companies?
According to our data, ACADIA Pharmaceuticals Inc. has a market capitalization of US$3.9b, and pays its CEO total annual compensation worth US$6.5m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$720k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.2m.
So Steve Davis is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at ACADIA Pharmaceuticals has changed over time.
Is ACADIA Pharmaceuticals Inc. Growing?
Over the last three years, ACADIA Pharmaceuticals Inc. has not seen its earnings per share change much, though there is a positive trend. In the last year, its revenue is up 50%.
It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. I'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Shareholders might be interested in this free visualization of analyst forecasts.
Has ACADIA Pharmaceuticals Inc. Been A Good Investment?
Since shareholders would have lost about 17% over three years, some ACADIA Pharmaceuticals Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Remuneration for Steve Davis is close enough to the median pay for a CEO of a similar sized company .
The company cannot boast particularly strong per share growth. And shareholder returns have been disappointing over the last three years. So many would argue that the CEO is certainly not underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling ACADIA Pharmaceuticals shares (free trial).
If you want to buy a stock that is better than ACADIA Pharmaceuticals, this free list of high return, low debt companies is a great place to look.
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 email@example.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.