What We Learned About Acceleron Pharma’s (NASDAQ:XLRN) CEO Pay

Habib Dable became the CEO of Acceleron Pharma Inc. (NASDAQ:XLRN) in 2016, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Acceleron Pharma

How Does Total Compensation For Habib Dable Compare With Other Companies In The Industry?

Our data indicates that Acceleron Pharma Inc. has a market capitalization of US$5.5b, and total annual CEO compensation was reported as US$4.3m for the year to December 2019. This means that the compensation hasn’t changed much from last year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$623k.

On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$6.4m. That is to say, Habib Dable is paid under the industry median. Furthermore, Habib Dable directly owns US$4.0m worth of shares in the company, implying that they are deeply invested in the company’s success.

Component20192018Proportion (2019)
Salary US$623k US$567k 15%
Other US$3.7m US$3.8m 85%
Total CompensationUS$4.3m US$4.3m100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Acceleron Pharma pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.

ceo-compensation
NasdaqGM:XLRN CEO Compensation August 26th 2020

A Look at Acceleron Pharma Inc.’s Growth Numbers

Over the last three years, Acceleron Pharma Inc. has not seen its earnings per share change much, though there is a slight positive movement. Its revenue is up 134% over the last year.

It’s great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn’t shabby. We wouldn’t say this is necessarily top notch growth, but it is certainly promising. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Acceleron Pharma Inc. Been A Good Investment?

We think that the total shareholder return of 152%, over three years, would leave most Acceleron Pharma Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude…

As we touched on above, Acceleron Pharma Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, shareholder returns are rock solid over the past three years, and that’s undoubtedly a good sign. So, considering these tasty returns, CEO compensation seems quite appropriate.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Acceleron Pharma that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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