In 2014 Meenu Chhabra was appointed CEO of Proteostasis Therapeutics, Inc. (NASDAQ:PTI). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Meenu Chhabra’s Compensation Compare With Similar Sized Companies?
Our data indicates that Proteostasis Therapeutics, Inc. is worth US$115m, and total annual CEO compensation was reported as US$1.3m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$515k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$524k.
Thus we can conclude that Meenu Chhabra receives more in total compensation than the median of a group of companies in the same market, and of similar size to Proteostasis Therapeutics, Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Proteostasis Therapeutics has changed over time.
Is Proteostasis Therapeutics, Inc. Growing?
On average over the last three years, Proteostasis Therapeutics, Inc. has grown earnings per share (EPS) by 20% each year (using a line of best fit). It achieved revenue growth of 12% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Proteostasis Therapeutics, Inc. Been A Good Investment?
Given the total loss of 83% over three years, many shareholders in Proteostasis Therapeutics, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Proteostasis Therapeutics, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Proteostasis Therapeutics shares (free trial).
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 email@example.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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