Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2000 Gregory Went was appointed CEO of Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Gregory Went's Compensation Compare With Similar Sized Companies?
According to our data, Adamas Pharmaceuticals, Inc. has a market capitalization of US$142m, and pays its CEO total annual compensation worth US$3.4m. (This figure is for the year to December 2018). That's a notable increase of 20% on last year. While we always look at total compensation first, we note that the salary component is less, at US$550k. 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, Gregory Went is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Adamas Pharmaceuticals, 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 Adamas Pharmaceuticals, below.
Is Adamas Pharmaceuticals, Inc. Growing?
Adamas Pharmaceuticals, Inc. has reduced its earnings per share by an average of 25% a year, over the last three years (measured with a line of best fit). Its revenue is up 1281% over last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Adamas Pharmaceuticals, Inc. Been A Good Investment?
Since shareholders would have lost about 68% over three years, some Adamas Pharmaceuticals, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Adamas Pharmaceuticals, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. So shareholders might not feel great about the fact that CEO pay increased on last year. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. So you may want to check if insiders are buying Adamas Pharmaceuticals shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 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.