Kevin Sayer became the CEO of DexCom, Inc. (NASDAQ:DXCM) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. 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$22b, and total annual CEO compensation was reported as US$9.6m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$601k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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).
That means Kevin Sayer receives fairly typical remuneration for the CEO of a large company. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at DexCom, below.
Is DexCom, Inc. Growing?
DexCom, Inc. has reduced its earnings per share by an average of 33% a year, over the last three years (measured with a line of best fit). Its revenue is up 48% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has DexCom, Inc. Been A Good Investment?
Boasting a total shareholder return of 199% over three years, DexCom, Inc. has done well by shareholders. 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 the growth could be better, the shareholder returns are clearly good. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. Shareholders may want to check for free if DexCom insiders are buying or selling shares.
Important note: DexCom 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.
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