In 2015 Jeff Nugent was appointed CEO of Sientra, Inc. (NASDAQ:SIEN). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Jeff Nugent’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Sientra, Inc. has a market cap of US$477m, and is paying total annual CEO compensation of US$2.5m. (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$636k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.6m.
As you can see, Jeff Nugent is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sientra, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Sientra, below.
Is Sientra, Inc. Growing?
Over the last three years Sientra, Inc. has shrunk its earnings per share by an average of 15% per year. It achieved revenue growth of 88% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It’s hard to reach a conclusion about business performance right now. This may be one to watch.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Sientra, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Sientra, Inc. for providing a total return of 223% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
We examined the amount Sientra, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sientra.
Or you might prefer examine intently this intuitive graph showing past earnings 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 firstname.lastname@example.org.