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Does Zynerba Pharmaceuticals, Inc.’s (NASDAQ:ZYNE) CEO Pay Reflect Performance?

Simply Wall St

Armando Anido became the CEO of Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Zynerba Pharmaceuticals

How Does Armando Anido’s Compensation Compare With Similar Sized Companies?

According to our data, Zynerba Pharmaceuticals, Inc. has a market capitalization of US$91m, and pays its CEO total annual compensation worth US$2.4m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$552k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$417k.

It would therefore appear that Zynerba Pharmaceuticals, Inc. pays Armando Anido more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. 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 Zynerba Pharmaceuticals has changed from year to year.

NasdaqGM:ZYNE CEO Compensation, March 1st 2019

Is Zynerba Pharmaceuticals, Inc. Growing?

Over the last three years, Zynerba Pharmaceuticals, Inc. has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. It saw its revenue drop -100% over the last year.

Unfortunately there is a complete lack of earnings per share improvement, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Zynerba Pharmaceuticals, Inc. Been A Good Investment?

Given the total loss of 19% over three years, many shareholders in Zynerba Pharmaceuticals, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount Zynerba Pharmaceuticals, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Zynerba Pharmaceuticals.

Important note: Zynerba Pharmaceuticals 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.

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 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. Thank you for reading.