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Sandy Macrae became the CEO of Sangamo Therapeutics, Inc. (NASDAQ:SGMO) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Sangamo Therapeutics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Sangamo Therapeutics, Inc.'s CEO Compensation With the industry
According to our data, Sangamo Therapeutics, Inc. has a market capitalization of US$1.6b, and paid its CEO total annual compensation worth US$4.0m over the year to December 2019. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$662k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$4.0m. This suggests that Sangamo Therapeutics remunerates its CEO largely in line with the industry average. Furthermore, Sandy Macrae directly owns US$293k worth of shares in the company.
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Sangamo Therapeutics pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Sangamo Therapeutics, Inc.'s Growth Numbers
Over the last three years, Sangamo Therapeutics, Inc. has shrunk its earnings per share by 9.2% per year. In the last year, its revenue is up 47%.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. 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 Sangamo Therapeutics, Inc. Been A Good Investment?
Given the total shareholder loss of 19% over three years, many shareholders in Sangamo Therapeutics, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Sangamo Therapeutics pays its CEO in line with similar-sized companies belonging to the same industry. Still, the company is logging healthy revenue growth over the last year. In contrast, over the same time span, shareholder returns are negative. EPS growth is bleak as well, adding fuel to the fire. It's tough for us to say Sandy is overpaid but a mixed bag in terms of performance will surely irk shareholders and reduce chances of a raise.
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 2 warning signs for Sangamo Therapeutics that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
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