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Is Veracyte, Inc.'s (NASDAQ:VCYT) CEO Pay Justified?

Simply Wall St

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In 2008 Bonnie Anderson was appointed CEO of Veracyte, Inc. (NASDAQ:VCYT). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Veracyte

How Does Bonnie Anderson's Compensation Compare With Similar Sized Companies?

According to our data, Veracyte, Inc. has a market capitalization of US$1.4b, and pays its CEO total annual compensation worth US$2.8m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$550k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.9m.

That means Bonnie Anderson receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Veracyte, below.

NasdaqGM:VCYT CEO Compensation, July 17th 2019

Is Veracyte, Inc. Growing?

Over the last three years Veracyte, Inc. has grown its earnings per share (EPS) by an average of 27% per year (using a line of best fit). It achieved revenue growth of 34% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Veracyte, Inc. Been A Good Investment?

I think that the total shareholder return of 473%, over three years, would leave most Veracyte, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Bonnie Anderson is paid around what is normal the leaders of comparable size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Veracyte insiders are buying or selling shares.

If you want to buy a stock that is better than Veracyte, 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.