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Is Senseonics Holdings, Inc. (NYSEMKT:SENS) Excessively Paying Its CEO?

Simply Wall St

In 2015 Tim Goodnow was appointed CEO of Senseonics Holdings, Inc. (NYSEMKT:SENS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Senseonics Holdings

How Does Tim Goodnow's Compensation Compare With Similar Sized Companies?

According to our data, Senseonics Holdings, Inc. has a market capitalization of US$236m, and pays its CEO total annual compensation worth US$2.2m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$536k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.2m.

Thus we can conclude that Tim Goodnow receives more in total compensation than the median of a group of companies in the same market, and of similar size to Senseonics Holdings, Inc.. However, this doesn't necessarily mean the pay 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, below, how CEO compensation at Senseonics Holdings has changed over time.

AMEX:SENS CEO Compensation, July 23rd 2019

Is Senseonics Holdings, Inc. Growing?

Over the last three years Senseonics Holdings, Inc. has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is up 121%.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Senseonics Holdings, Inc. Been A Good Investment?

Given the total loss of 64% over three years, many shareholders in Senseonics Holdings, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Senseonics Holdings, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Senseonics Holdings.

If you want to buy a stock that is better than Senseonics Holdings, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.com. 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.