Should You Worry About Pfenex Inc.'s (NYSEMKT:PFNX) CEO Pay Cheque?
Eef Schimmelpennink became the CEO of Pfenex Inc. (NYSEMKT:PFNX) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.
See our latest analysis for Pfenex
How Does Eef Schimmelpennink's Compensation Compare With Similar Sized Companies?
According to our data, Pfenex Inc. has a market capitalization of US$259m, and paid its CEO total annual compensation worth US$1.6m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$550k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.4m.
So Eef Schimmelpennink receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Pfenex has changed from year to year.
Is Pfenex Inc. Growing?
On average over the last three years, Pfenex Inc. has shrunk earnings per share by 18% each year (measured with a line of best fit). Its revenue is up 239% over last year.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has Pfenex Inc. Been A Good Investment?
Pfenex Inc. has served shareholders reasonably well, with a total return of 15% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Remuneration for Eef Schimmelpennink is close enough to the median pay for a CEO of a similar sized company .
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. On another note, Pfenex has 3 warning signs (and 1 which is significant) we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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