In 2003 Ton Logtenberg was appointed CEO of Merus N.V. (NASDAQ:MRUS). First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.
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How Does Ton Logtenberg's Compensation Compare With Similar Sized Companies?
According to our data, Merus N.V. has a market capitalization of US$313m, and pays its CEO total annual compensation worth €22m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at €433k. When we examined a selection of companies with market caps ranging from €179m to €717m, we found the median CEO total compensation was €1.6m.
It would therefore appear that Merus N.V. pays Ton Logtenberg 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 a visual representation of the CEO compensation at Merus, below.
Is Merus N.V. Growing?
Merus N.V. has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 44%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has Merus N.V. Been A Good Investment?
Most shareholders would probably be pleased with Merus N.V. for providing a total return of 60% over three years. 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.
We examined the amount Merus N.V. 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, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Merus shares (free trial).
If you want to buy a stock that is better than Merus, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.