In 2015 Mark Capone was appointed CEO of Myriad Genetics, Inc. (NASDAQ:MYGN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Mark Capone’s Compensation Compare With Similar Sized Companies?
According to our data, Myriad Genetics, Inc. has a market capitalization of US$2.0b, and pays its CEO total annual compensation worth US$7.1m. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$852k. 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$4.0m.
As you can see, Mark Capone is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Myriad Genetics, Inc. is paying too much. 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 Myriad Genetics has changed over time.
Is Myriad Genetics, Inc. Growing?
Over the last three years Myriad Genetics, Inc. has shrunk its earnings per share by an average of 20% per year (measured with a line of best fit). In the last year, its revenue is up 15%.
Unfortunately, earnings per share have trended lower over the last three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Has Myriad Genetics, Inc. Been A Good Investment?
Since shareholders would have lost about 13% over three years, some Myriad Genetics, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Myriad Genetics, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Myriad Genetics.
Important note: Myriad Genetics 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.
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