Jeff Nugent has been the CEO of Sientra, Inc. (NASDAQ:SIEN) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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 Jeff Nugent’s Compensation Compare With Similar Sized Companies?
According to our data, Sientra, Inc. has a market capitalization of US$252m, and pays its CEO total annual compensation worth US$3.0m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$636k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.
It would therefore appear that Sientra, Inc. pays Jeff Nugent 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Sientra has changed over time.
Is Sientra, Inc. Growing?
Over the last three years Sientra, Inc. has shrunk its earnings per share by an average of 5.9% per year (measured with a line of best fit). Its revenue is up 62% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It’s hard to reach a conclusion about business performance right now. This may be one to watch.
Has Sientra, Inc. Been A Good Investment?
Since shareholders would have lost about 37% over three years, some Sientra, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Sientra, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sientra (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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. Thank you for reading.