Here's What We Learned About The CEO Pay At bluebird bio, Inc. (NASDAQ:BLUE)
Nick Leschly has been the CEO of bluebird bio, Inc. (NASDAQ:BLUE) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether bluebird bio pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for bluebird bio
Comparing bluebird bio, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that bluebird bio, Inc. has a market capitalization of US$3.8b, and reported total annual CEO compensation of US$13m for the year to December 2019. Notably, that's a decrease of 45% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$660k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$6.4m. Hence, we can conclude that Nick Leschly is remunerated higher than the industry median. Furthermore, Nick Leschly directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$660k | US$610k | 5% |
Other | US$12m | US$23m | 95% |
Total Compensation | US$13m | US$24m | 100% |
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. It's interesting to note that bluebird bio allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at bluebird bio, Inc.'s Growth Numbers
Over the last three years, bluebird bio, Inc. has shrunk its earnings per share by 23% per year. In the last year, its revenue is up 324%.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has bluebird bio, Inc. Been A Good Investment?
Given the total shareholder loss of 56% over three years, many shareholders in bluebird bio, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we noted earlier, bluebird bio pays its CEO higher than the norm for similar-sized companies belonging to the same industry. At the same time, looking at EPS and total shareholder returns, it's tough to say bluebird bio is in a sound position, considering both metrics are down. On the bright side, at lease revenue growth seems to be marching northward. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for bluebird bio that investors should be aware of in a dynamic business environment.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
