In 2017 Sean George was appointed CEO of Invitae Corporation (NYSE:NVTA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Sean George's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Invitae Corporation has a market cap of US$1.9b, and reported total annual CEO compensation of US$2.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$500k. 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 examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
Most shareholders would consider it a positive that Sean George takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Invitae, below.
Is Invitae Corporation Growing?
Invitae Corporation has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). It achieved revenue growth of 63% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Invitae Corporation Been A Good Investment?
Most shareholders would probably be pleased with Invitae Corporation for providing a total return of 134% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like Invitae Corporation pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Sean George deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Invitae 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.
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