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John Oyler has been the CEO of BeiGene, Ltd. (NASDAQ:BGNE) since 2010. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does John Oyler's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that BeiGene, Ltd. has a market cap of US$7.9b, and is paying total annual CEO compensation of US$10m. (This is based on the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$515k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.4m.
Thus we can conclude that John Oyler receives more in total compensation than the median of a group of companies in the same market, and of similar size to BeiGene, Ltd.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at BeiGene, below.
Is BeiGene, Ltd. Growing?
Over the last three years BeiGene, Ltd. has shrunk its earnings per share by an average of 19% per year (measured with a line of best fit). In the last year, its revenue is down -17%.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has BeiGene, Ltd. Been A Good Investment?
Boasting a total shareholder return of 352% over three years, BeiGene, Ltd. has done well by shareholders. 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.
We compared total CEO remuneration at BeiGene, Ltd. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
On the other hand, returns have been good, so the company is doing something right. So on this analysis we'd stop short of criticizing the level of CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling BeiGene (free visualization of insider trades).
Important note: BeiGene may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 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.