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In 2015 Rob Bazemore was appointed CEO of Epizyme, Inc. (NASDAQ:EPZM). 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 process should give us an idea about how appropriately the CEO is paid.
How Does Rob Bazemore’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Epizyme, Inc. has a market cap of US$1.1b, and is paying total annual CEO compensation of US$3.7m. (This is based on the year to December 2018). That’s just a smallish increase of 1.6% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$576k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.
Thus we can conclude that Rob Bazemore receives more in total compensation than the median of a group of companies in the same market, and of similar size to Epizyme, Inc.. However, this doesn’t necessarily mean the pay 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.
The graphic below shows how CEO compensation at Epizyme has changed from year to year.
Is Epizyme, Inc. Growing?
Epizyme, Inc. has increased its earnings per share (EPS) by an average of 3.3% a year, over the last three years (using a line of best fit). It achieved revenue growth of 196% over the last year.
I like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list.
Has Epizyme, Inc. Been A Good Investment?
Epizyme, Inc. has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Epizyme, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Whatever your view on compensation, you might want to check if insiders are buying or selling Epizyme shares (free trial).
Important note: Epizyme may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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.