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Is Heron Therapeutics, Inc.'s (NASDAQ:HRTX) CEO Pay Fair?

Simply Wall St

Barry Quart has been the CEO of Heron Therapeutics, Inc. (NASDAQ:HRTX) since 2013. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Heron Therapeutics

How Does Barry Quart's Compensation Compare With Similar Sized Companies?

According to our data, Heron Therapeutics, Inc. has a market capitalization of US$1.9b, and paid its CEO total annual compensation worth US$6.0m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$614k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.0m.

As you can see, Barry Quart is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Heron Therapeutics, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Heron Therapeutics has changed from year to year.

NasdaqCM:HRTX CEO Compensation, November 11th 2019

Is Heron Therapeutics, Inc. Growing?

On average over the last three years, Heron Therapeutics, Inc. has grown earnings per share (EPS) by 19% each year (using a line of best fit). Its revenue is up 146% over 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. Shareholders might be interested in this free visualization of analyst forecasts.

Has Heron Therapeutics, Inc. Been A Good Investment?

Heron Therapeutics, Inc. has served shareholders reasonably well, with a total return of 13% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by Heron Therapeutics, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. Shareholders may want to check for free if Heron Therapeutics insiders are buying or selling shares.

Important note: Heron Therapeutics 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.