Does Trxade Group, Inc.'s (NASDAQ:MEDS) CEO Pay Matter?
Suren Ajjarapu became the CEO of Trxade Group, Inc. (NASDAQ:MEDS) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Trxade Group
How Does Suren Ajjarapu's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Trxade Group, Inc. has a market cap of US$46m, and reported total annual CEO compensation of US$750k for the year to December 2019. We note that's an increase of 275% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$250k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$615k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Trxade Group stands. On a sector level, around 23% of total compensation represents salary and 77% is other remuneration. Trxade Group is paying a higher share of its remuneration through a salary in comparison to the overall industry.
So Suren Ajjarapu is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. The graphic below shows how CEO compensation at Trxade Group has changed from year to year.
Is Trxade Group, Inc. Growing?
Over the last three years Trxade Group, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 26% per year (using a line of best fit). It achieved revenue growth of 80% over the last year.
This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has Trxade Group, Inc. Been A Good Investment?
Trxade Group, Inc. has served shareholders reasonably well, with a total return of 24% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
Remuneration for Suren Ajjarapu is close enough to the median pay for a CEO of a similar sized company .
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. Looking into other areas, we've picked out 3 warning signs for Trxade Group that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
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