Steve Isaacs became the CEO of Aduro BioTech, Inc. (NASDAQ:ADRO) in 2008. 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. 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.
How Does Steve Isaacs's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Aduro BioTech, Inc. has a market cap of US$75m, and reported total annual CEO compensation of US$3.4m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$604k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$510k.
As you can see, Steve Isaacs is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Aduro BioTech, 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 Aduro BioTech has changed from year to year.
Is Aduro BioTech, Inc. Growing?
Aduro BioTech, Inc. has reduced its earnings per share by an average of 8.7% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 13% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Aduro BioTech, Inc. Been A Good Investment?
Given the total loss of 91% over three years, many shareholders in Aduro BioTech, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Aduro BioTech, 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.
We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if Aduro BioTech insiders are buying or selling shares.
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.