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How Should Investors React To Arcadia Biosciences, Inc.'s (NASDAQ:RKDA) CEO Pay?

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Raj Ketkar became the CEO of Arcadia Biosciences, Inc. (NASDAQ:RKDA) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Arcadia Biosciences

How Does Raj Ketkar's Compensation Compare With Similar Sized Companies?

According to our data, Arcadia Biosciences, Inc. has a market capitalization of US$20m, and pays its CEO total annual compensation worth US$904k. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$360k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$464k.

It would therefore appear that Arcadia Biosciences, Inc. pays Raj Ketkar 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 Arcadia Biosciences has changed from year to year.

NasdaqCM:RKDA CEO Compensation, July 12th 2019
NasdaqCM:RKDA CEO Compensation, July 12th 2019

Is Arcadia Biosciences, Inc. Growing?

Over the last three years Arcadia Biosciences, Inc. has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). It saw its revenue drop -56% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Arcadia Biosciences, Inc. Been A Good Investment?

Given the total loss of 93% over three years, many shareholders in Arcadia Biosciences, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Arcadia Biosciences, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Arcadia Biosciences.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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