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Here's What We Think About Marrone Bio Innovations, Inc.'s (NASDAQ:MBII) CEO Pay

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Pam Marrone became the CEO of Marrone Bio Innovations, Inc. (NASDAQ:MBII) in 2006. 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Marrone Bio Innovations

How Does Pam Marrone's Compensation Compare With Similar Sized Companies?

Our data indicates that Marrone Bio Innovations, Inc. is worth US$102m, and total annual CEO compensation was reported as US$785k for the year to December 2019. That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$370k. 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$601k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 18% of total compensation represents salary and 82% is other remuneration. According to our research, Marrone Bio Innovations has allocated a higher percentage of pay to salary in comparison to the broader sector.

Thus we can conclude that Pam Marrone receives more in total compensation than the median of a group of companies in the same market, and of similar size to Marrone Bio Innovations, Inc.. However, this doesn't necessarily mean the pay 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. You can see a visual representation of the CEO compensation at Marrone Bio Innovations, below.

NasdaqCM:MBII CEO Compensation April 13th 2020
NasdaqCM:MBII CEO Compensation April 13th 2020

Is Marrone Bio Innovations, Inc. Growing?

Over the last three years Marrone Bio Innovations, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 65% per year (using a line of best fit). In the last year, its revenue is up 38%.

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. It could be important to check this free visual depiction of what analysts expect for the future.

Has Marrone Bio Innovations, Inc. Been A Good Investment?

Since shareholders would have lost about 61% over three years, some Marrone Bio Innovations, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Marrone Bio Innovations, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering positive per-share earnings movement, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. On another note, Marrone Bio Innovations has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

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.

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.

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. Thank you for reading.