Larry Mehren has been the CEO of Accelerate Diagnostics, Inc. (NASDAQ:AXDX) since 2012. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Larry Mehren’s Compensation Compare With Similar Sized Companies?
According to our data, Accelerate Diagnostics, Inc. has a market capitalization of US$1.2b, and pays its CEO total annual compensation worth US$375k. (This is based on the year to December 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$375k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO compensation was US$2.2m.
Most shareholders would consider it a positive that Larry Mehren takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Accelerate Diagnostics has changed over time.
Is Accelerate Diagnostics, Inc. Growing?
On average over the last three years, Accelerate Diagnostics, Inc. has shrunk earnings per share by 11% each year (measured with a line of best fit). Its revenue is up 36% over last year.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It’s hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Accelerate Diagnostics, Inc. Been A Good Investment?
I think that the total shareholder return of 81%, over three years, would leave most Accelerate Diagnostics, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Accelerate Diagnostics, Inc. is currently paying its CEO below what is normal for companies of its size.
It’s well worth noting that while Larry Mehren is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. Although we could see higher growth, we’d argue the remuneration is modest, based on these observations. So you may want to check if insiders are buying Accelerate Diagnostics 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.
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