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How Should Investors React To Cerus Corporation’s (NASDAQ:CERS) CEO Pay?

Joel Foster

In 2011 Obi Greenman was appointed CEO of Cerus Corporation (NASDAQ:CERS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

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How Does Obi Greenman’s Compensation Compare With Similar Sized Companies?

According to our data, Cerus Corporation has a market capitalization of US$731m, and pays its CEO total annual compensation worth US$2.1m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$597k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO compensation of that group was US$2.3m.

That means Obi Greenman receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Cerus has changed over time.

NasdaqGM:CERS CEO Compensation January 16th 19

Is Cerus Corporation Growing?

On average over the last three years, Cerus Corporation has grown earnings per share (EPS) by 12% each year (using a line of best fit). Its revenue is up 62% over last year.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

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

Has Cerus Corporation Been A Good Investment?

With a total shareholder return of 5.4% over three years, Cerus Corporation has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

Obi Greenman is paid around the same as most CEOs of similar size companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Cerus shares (free trial).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.