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This article will reflect on the compensation paid to Thomas Schall who has served as CEO of ChemoCentryx, Inc. (NASDAQ:CCXI) since 1997. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for ChemoCentryx.
How Does Total Compensation For Thomas Schall Compare With Other Companies In The Industry?
According to our data, ChemoCentryx, Inc. has a market capitalization of US$3.8b, and paid its CEO total annual compensation worth US$3.3m over the year to December 2019. That's a notable decrease of 13% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$643k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$7.5m. Accordingly, ChemoCentryx pays its CEO under the industry median. Moreover, Thomas Schall also holds US$127m worth of ChemoCentryx stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. ChemoCentryx sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at ChemoCentryx, Inc.'s Growth Numbers
Over the last three years, ChemoCentryx, Inc. has shrunk its earnings per share by 43% per year. It saw its revenue drop 19% over the last year.
The decline in earnings is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has ChemoCentryx, Inc. Been A Good Investment?
We think that the total shareholder return of 448%, over three years, would leave most ChemoCentryx, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Thomas is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. And while earnings growth is negative, shareholder returns have been healthy recently. Although we'd like to see positive earnings growth, we'd argue the remuneration is modest, based on our observations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for ChemoCentryx that investors should be aware of in a dynamic business environment.
Switching gears from ChemoCentryx, 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.
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