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In 2015 Patrick Soon-Shiong was appointed CEO of NantKwest, Inc. (NASDAQ:NK). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Patrick Soon-Shiong’s Compensation Compare With Similar Sized Companies?
According to our data, NantKwest, Inc. has a market capitalization of US$93m, and pays its CEO total annual compensation worth US$636k. (This number is for the twelve months until December 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$636k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$299k.
As you can see, Patrick Soon-Shiong is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NantKwest, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at NantKwest has changed over time.
Is NantKwest, Inc. Growing?
Over the last three years NantKwest, Inc. has grown its earnings per share (EPS) by an average of 42% per year (using a line of best fit). In the last year, its revenue is up 11%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has NantKwest, Inc. Been A Good Investment?
Given the total loss of 83% over three years, many shareholders in NantKwest, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at NantKwest, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying NantKwest shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.