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Clay Siegall became the CEO of Seattle Genetics, Inc. (NASDAQ:SGEN) in 2002. This analysis aims first to contrast CEO compensation with other large companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Clay Siegall's Compensation Compare With Similar Sized Companies?
According to our data, Seattle Genetics, Inc. has a market capitalization of US$11b, and pays its CEO total annual compensation worth US$18m. (This number is for the twelve months until December 2018). Notably, that's an increase of 110% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$919k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
As you can see, Clay Siegall is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Seattle Genetics, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Seattle Genetics has changed from year to year.
Is Seattle Genetics, Inc. Growing?
Over the last three years Seattle Genetics, Inc. has shrunk its earnings per share by an average of 2.0% per year (measured with a line of best fit). It achieved revenue growth of 38% over the last year.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Seattle Genetics, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Seattle Genetics, Inc. for providing a total return of 82% over three years. 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.
We examined the amount Seattle Genetics, Inc. pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. Considering this fine result for investors, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Seattle Genetics shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.