Charles Baum has been the CEO of Mirati Therapeutics, Inc. (NASDAQ:MRTX) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
How Does Charles Baum's Compensation Compare With Similar Sized Companies?
Our data indicates that Mirati Therapeutics, Inc. is worth US$4.6b, and total annual CEO compensation was reported as US$4.9m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$580k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
So Charles Baum 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.
You can see a visual representation of the CEO compensation at Mirati Therapeutics, below.
Is Mirati Therapeutics, Inc. Growing?
Mirati Therapeutics, Inc. has reduced its earnings per share by an average of 1.8% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 34% over the last year.
In the last three years the company has failed to grow earnings per share. 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Mirati Therapeutics, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Mirati Therapeutics, Inc. for providing a total return of 1939% 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.
Charles Baum is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. Whatever your view on compensation, you might want to check if insiders are buying or selling Mirati Therapeutics shares (free trial).
If you want to buy a stock that is better than Mirati Therapeutics, this free list of high return, low debt companies is a great place to look.
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