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A Quick Analysis On Fulgent Genetics' (NASDAQ:FLGT) CEO Compensation

Simply Wall St

This article will reflect on the compensation paid to Ming Hsieh who has served as CEO of Fulgent Genetics, Inc. (NASDAQ:FLGT) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Fulgent Genetics.

View our latest analysis for Fulgent Genetics

Comparing Fulgent Genetics, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Fulgent Genetics, Inc. has a market capitalization of US$620m, and reported total annual CEO compensation of US$240k for the year to December 2019. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$240k.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$3.3m. In other words, Fulgent Genetics pays its CEO lower than the industry median. Furthermore, Ming Hsieh directly owns US$234m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$240k

US$240k

100%

Other

-

-

-

Total Compensation

US$240k

US$240k

100%

On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. On a company level, Fulgent Genetics prefers to reward its CEO through a salary, opting not to pay Ming Hsieh through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at Fulgent Genetics, Inc.'s Growth Numbers

Fulgent Genetics, Inc.'s earnings per share (EPS) grew 57% per year over the last three years. It achieved revenue growth of 58% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Fulgent Genetics, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Fulgent Genetics, Inc. for providing a total return of 426% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Fulgent Genetics pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Fulgent Genetics pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Since earnings growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Ming's performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 4 warning signs for Fulgent Genetics that investors should think about before committing capital to this stock.

Switching gears from Fulgent Genetics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.