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How Much Does ADMA Biologics' (NASDAQ:ADMA) CEO Make?

Simply Wall St
·4 mins read

This article will reflect on the compensation paid to Adam Grossman who has served as CEO of ADMA Biologics, Inc. (NASDAQ:ADMA) since 2011. This analysis will also assess whether ADMA Biologics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for ADMA Biologics

How Does Total Compensation For Adam Grossman Compare With Other Companies In The Industry?

At the time of writing, our data shows that ADMA Biologics, Inc. has a market capitalization of US$308m, and reported total annual CEO compensation of US$1.7m for the year to December 2019. We note that's an increase of 9.6% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$536k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.5m. Accordingly, ADMA Biologics pays its CEO under the industry median. Moreover, Adam Grossman also holds US$3.4m worth of ADMA Biologics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$536k

US$536k

31%

Other

US$1.2m

US$1.0m

69%

Total Compensation

US$1.7m

US$1.6m

100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. ADMA Biologics pays out 31% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at ADMA Biologics, Inc.'s Growth Numbers

Over the past three years, ADMA Biologics, Inc. has seen its earnings per share (EPS) grow by 24% per year. It achieved revenue growth of 118% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has ADMA Biologics, Inc. Been A Good Investment?

ADMA Biologics, Inc. has not done too badly by shareholders, with a total return of 6.6%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, ADMA Biologics, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, earnings growth has been rock solid for the past three years. However, shareholder returns have failed to show the same level of growth. Shareholder returns could be better but we're pleased with the positive EPS growth. So considering these factors, we think Adam is modestly compensated.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for ADMA Biologics you should be aware of, and 1 of them makes us a bit uncomfortable.

Important note: ADMA Biologics is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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@simplywallst.com.