Is Vermillion Inc’s (NASDAQ:VRML) CEO Salary Justified?
Valerie Palmieri became the CEO of Vermillion Inc (NASDAQ:VRML) in 2015. 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Vermillion
How Does Valerie Palmieri’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Vermillion Inc has a market cap of US$43m, and is paying total annual CEO compensation of US$1m. That’s a fairly small increase of 7.4% on year before. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$290k.
It would therefore appear that Vermillion Inc pays Valerie Palmieri more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Vermillion has changed over time.
Is Vermillion Inc Growing?
Over the last three years Vermillion Inc has grown its earnings per share (EPS) by an average of 33% per year. Its revenue is down -6.5% over last year.
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.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Vermillion Inc Been A Good Investment?
Since shareholders would have lost about 71% over three years, some Vermillion Inc shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We compared total CEO remuneration at Vermillion Inc with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark 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. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Vermillion Inc shares with their own money (free access).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
