- Oops!Something went wrong.Please try again later.
We have been pretty impressed with the performance at Dicerna Pharmaceuticals, Inc. (NASDAQ:DRNA) recently and CEO Douglas Fambrough deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 03 June 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
How Does Total Compensation For Douglas Fambrough Compare With Other Companies In The Industry?
Our data indicates that Dicerna Pharmaceuticals, Inc. has a market capitalization of US$2.4b, and total annual CEO compensation was reported as US$6.6m for the year to December 2020. Notably, that's an increase of 31% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$575k.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$6.6m. From this we gather that Douglas Fambrough is paid around the median for CEOs in the industry. What's more, Douglas Fambrough holds US$1.2m worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. It's interesting to note that Dicerna Pharmaceuticals allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Dicerna Pharmaceuticals, Inc.'s Growth Numbers
Dicerna Pharmaceuticals, Inc. has seen its earnings per share (EPS) increase by 15% a year over the past three years. It achieved revenue growth of 224% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Dicerna Pharmaceuticals, Inc. Been A Good Investment?
Boasting a total shareholder return of 121% over three years, Dicerna Pharmaceuticals, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is potentially serious) in Dicerna Pharmaceuticals we think you should know about.
Switching gears from Dicerna Pharmaceuticals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.