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Is Veru Inc.'s (NASDAQ:VERU) CEO Overpaid Relative To Its Peers?

Simply Wall St

Mitch Steiner has been the CEO of Veru Inc. (NASDAQ:VERU) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.

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See our latest analysis for Veru

How Does Mitch Steiner's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Veru Inc. has a market cap of US$108m, and is paying total annual CEO compensation of US$740k. (This is based on the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$383k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$452k.

As you can see, Mitch Steiner is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Veru Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Veru has changed from year to year.

NasdaqCM:VERU CEO Compensation, May 24th 2019

Is Veru Inc. Growing?

Veru Inc. has reduced its earnings per share by an average of 79% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 83% over the last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Veru Inc. Been A Good Investment?

With a total shareholder return of 28% over three years, Veru Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared the total CEO remuneration paid by Veru Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

We generally prefer to see stronger EPS growth, and we're not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Whatever your view on compensation, you might want to check if insiders are buying or selling Veru shares (free trial).

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