Mike Raab has been the CEO of Ardelyx, Inc. (NASDAQ:ARDX) since 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.
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How Does Mike Raab's Compensation Compare With Similar Sized Companies?
Our data indicates that Ardelyx, Inc. is worth US$196m, and total annual CEO compensation is US$4.2m. (This is based on the year to December 2018). That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$575k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.
As you can see, Mike Raab is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ardelyx, 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 a visual representation of the CEO compensation at Ardelyx, below.
Is Ardelyx, Inc. Growing?
On average over the last three years, Ardelyx, Inc. has grown earnings per share (EPS) by 27% each year (using a line of best fit). Its revenue is down -99% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has Ardelyx, Inc. Been A Good Investment?
Since shareholders would have lost about 58% over three years, some Ardelyx, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Ardelyx, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. 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 Ardelyx insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.