Nick Colangelo has been the CEO of Vericel Corporation (NASDAQ:VCEL) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Nick Colangelo’s Compensation Compare With Similar Sized Companies?
According to our data, Vericel Corporation has a market capitalization of US$875m, and pays its CEO total annual compensation worth US$1.5m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$556k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO compensation of that group was US$2.2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Vericel has changed over time.
Is Vericel Corporation Growing?
Over the last three years Vericel Corporation has grown its earnings per share (EPS) by an average of 37% per year (using a line of best fit). It achieved revenue growth of 42% over the last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Vericel Corporation Been A Good Investment?
Boasting a total shareholder return of 852% over three years, Vericel Corporation has done well by shareholders. 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.
It looks like Vericel Corporation pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Nick Colangelo deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Vericel (free visualization of insider trades).
Important note: Vericel may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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