In 2015 Mark Capone was appointed CEO of Myriad Genetics, Inc. (NASDAQ:MYGN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Mark Capone’s Compensation Compare With Similar Sized Companies?
According to our data, Myriad Genetics, Inc. has a market capitalization of US$2.5b, and paid its CEO total annual compensation worth US$8.9m over the year to June 2019. That’s a notable increase of 26% on last year. While we always look at total compensation first, we note that the salary component is less, at US$887k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
It would therefore appear that Myriad Genetics, Inc. pays Mark Capone 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 might want to check this free visual report on analyst forecasts for future earnings.
The graphic below shows how CEO compensation at Myriad Genetics has changed from year to year.
Is Myriad Genetics, Inc. Growing?
Myriad Genetics, Inc. has reduced its earnings per share by an average of 28% a year, over the last three years (measured with a line of best fit). Its revenue is up 14% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Myriad Genetics, Inc. Been A Good Investment?
Boasting a total shareholder return of 107% over three years, Myriad Genetics, Inc. has done well by shareholders. 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 Myriad Genetics, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. But clearly there are some positives, because investors have done well over the same time frame. Considering this, shareholders are probably not too worried about the CEO compensation. So you may want to check if insiders are buying Myriad Genetics shares with their own money (free access).
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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