Peter Maag has been the CEO of CareDx, Inc (NASDAQ:CDNA) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. 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 Peter Maag's Compensation Compare With Similar Sized Companies?
Our data indicates that CareDx, Inc is worth US$1.0b, and total annual CEO compensation was reported as US$5.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$484k. 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 looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.6m.
Thus we can conclude that Peter Maag receives more in total compensation than the median of a group of companies in the same market, and of similar size to CareDx, Inc. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at CareDx, below.
Is CareDx, Inc Growing?
On average over the last three years, CareDx, Inc has grown earnings per share (EPS) by 23% each year (using a line of best fit). Its revenue is up 75% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has CareDx, Inc Been A Good Investment?
Most shareholders would probably be pleased with CareDx, Inc for providing a total return of 1022% over three years. 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 examined the amount CareDx, Inc pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if CareDx insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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