A. Kazimi has been the CEO of Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) since 1999. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does A. Kazimi's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Cumberland Pharmaceuticals Inc. has a market cap of US$81m, and reported total annual CEO compensation of US$1.5m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$545k. 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 took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$491k.
It would therefore appear that Cumberland Pharmaceuticals Inc. pays A. Kazimi more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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 Cumberland Pharmaceuticals, below.
Is Cumberland Pharmaceuticals Inc. Growing?
Cumberland Pharmaceuticals Inc. has reduced its earnings per share by an average of 39% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 9.3%.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced 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 Cumberland Pharmaceuticals Inc. Been A Good Investment?
Cumberland Pharmaceuticals Inc. has generated a total shareholder return of 7.2% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Cumberland Pharmaceuticals Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the CEO pay is too low. So you may want to check if insiders are buying Cumberland Pharmaceuticals shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.