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Should You Worry About Veracyte, Inc.'s (NASDAQ:VCYT) CEO Pay?

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Simply Wall St
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Bonnie Anderson has been the CEO of Veracyte, Inc. (NASDAQ:VCYT) since 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Veracyte

How Does Bonnie Anderson's Compensation Compare With Similar Sized Companies?

According to our data, Veracyte, Inc. has a market capitalization of US$1.5b, and paid its CEO total annual compensation worth US$2.8m 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 note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.8m.

So Bonnie Anderson 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.

You can see a visual representation of the CEO compensation at Veracyte, below.

NasdaqGM:VCYT CEO Compensation, January 20th 2020
NasdaqGM:VCYT CEO Compensation, January 20th 2020

Is Veracyte, Inc. Growing?

Veracyte, Inc. has increased its earnings per share (EPS) by an average of 38% a year, over the last three years (using a line of best fit). It achieved revenue growth of 36% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Veracyte, Inc. Been A Good Investment?

Boasting a total shareholder return of 306% over three years, Veracyte, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Bonnie Anderson is paid around what is normal the leaders of comparable size companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Veracyte.

If you want to buy a stock that is better than Veracyte, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.