J. Wolchko became the CEO of Fate Therapeutics, Inc. (NASDAQ:FATE) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does J. Wolchko’s Compensation Compare With Similar Sized Companies?
According to our data, Fate Therapeutics, Inc. has a market capitalization of US$1.0b, and pays its CEO total annual compensation worth US$1.3m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$480k. 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.
A first glance this seems like a real positive for shareholders, since J. Wolchko is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Fate Therapeutics has changed over time.
Is Fate Therapeutics, Inc. Growing?
On average over the last three years, Fate Therapeutics, Inc. has grown earnings per share (EPS) by 1.4% each year (using a line of best fit). Revenue was pretty flat on last year.
I’m not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Fate Therapeutics, Inc. Been A Good Investment?
I think that the total shareholder return of 547%, over three years, would leave most Fate Therapeutics, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It appears that Fate Therapeutics, Inc. remunerates its CEO below most similar sized companies.
J. Wolchko receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. Although we could see higher growth, we’d argue the remuneration is modest, based on these observations. Whatever your view on compensation, you might want to check if insiders are buying or selling Fate Therapeutics shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
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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 email@example.com.