Kevin Sayer has been the CEO of DexCom, Inc. (NASDAQ:DXCM) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kevin Sayer's Compensation Compare With Similar Sized Companies?
Our data indicates that DexCom, Inc. is worth US$14b, and total annual CEO compensation is US$9.6m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$601k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
So Kevin Sayer receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at DexCom has changed over time.
Is DexCom, Inc. Growing?
DexCom, Inc. has increased its earnings per share (EPS) by an average of 5.9% a year, over the last three years (using a line of best fit). It achieved revenue growth of 48% over the last year.
I like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. So while I'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Shareholders might be interested in this free visualization of analyst forecasts.
Has DexCom, Inc. Been A Good Investment?
I think that the total shareholder return of 73%, over three years, would leave most DexCom, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Kevin Sayer is paid around what is normal the leaders of larger companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling DexCom (free visualization of insider trades).
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.