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Clay Siegall has been the CEO of Seattle Genetics, Inc. (NASDAQ:SGEN) since 2002, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Seattle Genetics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Clay Siegall Compare With Other Companies In The Industry?
Our data indicates that Seattle Genetics, Inc. has a market capitalization of US$32b, and total annual CEO compensation was reported as US$15m for the year to December 2019. Notably, that's a decrease of 20% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$963k.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$15m. This suggests that Seattle Genetics remunerates its CEO largely in line with the industry average. Moreover, Clay Siegall also holds US$96m worth of Seattle Genetics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. In Seattle Genetics' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Seattle Genetics, Inc.'s Growth Numbers
Over the last three years, Seattle Genetics, Inc. has shrunk its earnings per share by 15% per year. It achieved revenue growth of 35% over the last year.
The reduction in earnings, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Seattle Genetics, Inc. Been A Good Investment?
We think that the total shareholder return of 235%, over three years, would leave most Seattle Genetics, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Seattle Genetics, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company has logged solid shareholder returns for the past three years. At the same time, revenues are also moving northwards at a healthy pace. On a worrying note, its important to acknowledge that EPS growth has been negative recently. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Seattle Genetics that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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