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Should You Worry About ADMA Biologics, Inc.'s (NASDAQ:ADMA) CEO Salary Level?

Simply Wall St

Adam Grossman became the CEO of ADMA Biologics, Inc. (NASDAQ:ADMA) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for ADMA Biologics

How Does Adam Grossman's Compensation Compare With Similar Sized Companies?

According to our data, ADMA Biologics, Inc. has a market capitalization of US$235m, and paid its CEO total annual compensation worth US$1.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$536k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.2m.

It would therefore appear that ADMA Biologics, Inc. pays Adam Grossman 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. 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, below, how CEO compensation at ADMA Biologics has changed over time.

NasdaqCM:ADMA CEO Compensation, October 9th 2019

Is ADMA Biologics, Inc. Growing?

Over the last three years ADMA Biologics, Inc. has grown its earnings per share (EPS) by an average of 9.9% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

I would prefer it if there was revenue growth, but I'm happy with the EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has ADMA Biologics, Inc. Been A Good Investment?

With a three year total loss of 42%, ADMA Biologics, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount ADMA Biologics, 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.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ADMA Biologics (free visualization of insider trades).

Important note: ADMA Biologics may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.