Is TRACON Pharmaceuticals, Inc.'s (NASDAQ:TCON) CEO Pay Justified?
Charles Theuer became the CEO of TRACON Pharmaceuticals, Inc. (NASDAQ:TCON) in 2006. 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 TRACON Pharmaceuticals
How Does Charles Theuer's Compensation Compare With Similar Sized Companies?
According to our data, TRACON Pharmaceuticals, Inc. has a market capitalization of US$16m, and paid its CEO total annual compensation worth US$1.1m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$542k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$515k.
As you can see, Charles Theuer is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean TRACON Pharmaceuticals, Inc. is paying too much. 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 TRACON Pharmaceuticals has changed over time.
Is TRACON Pharmaceuticals, Inc. Growing?
Over the last three years TRACON Pharmaceuticals, Inc. has grown its earnings per share (EPS) by an average of 31% per year (using a line of best fit). In the last year, the company lost virtually all of its revenue.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.
Has TRACON Pharmaceuticals, Inc. Been A Good Investment?
Given the total loss of 92% over three years, many shareholders in TRACON Pharmaceuticals, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We examined the amount TRACON Pharmaceuticals, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, 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. Shareholders may want to check for free if TRACON Pharmaceuticals insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
