Tom Wiggans has been the CEO of Dermira, Inc. (NASDAQ:DERM) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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 Tom Wiggans's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Dermira, Inc. has a market cap of US$443m, and is paying total annual CEO compensation of US$4.4m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$573k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.
It would therefore appear that Dermira, Inc. pays Tom Wiggans more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. 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 Dermira, below.
Is Dermira, Inc. Growing?
On average over the last three years, Dermira, Inc. has shrunk earnings per share by 26% each year (measured with a line of best fit). Its revenue is up 1079% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Dermira, Inc. Been A Good Investment?
Since shareholders would have lost about 76% over three years, some Dermira, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Dermira, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Dermira.
If you want to buy a stock that is better than Dermira, this free list of high return, low debt companies is a great place to look.
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