Alan Auerbach has been the CEO of Puma Biotechnology, Inc. (NASDAQ:PBYI) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Alan Auerbach's Compensation Compare With Similar Sized Companies?
According to our data, Puma Biotechnology, Inc. has a market capitalization of US$1.3b, and pays its CEO total annual compensation worth US$2.8m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$733k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.6m.
So Alan Auerbach is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Puma Biotechnology has changed from year to year.
Is Puma Biotechnology, Inc. Growing?
Puma Biotechnology, Inc. has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). Its revenue is up 807% over last year.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Puma Biotechnology, Inc. Been A Good Investment?
With a total shareholder return of 1.8% over three years, Puma Biotechnology, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
Alan Auerbach is paid around what is normal the leaders of comparable size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. Shareholders may want to check for free if Puma Biotechnology insiders are buying or selling shares.
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.
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