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In 2014 John Sperzel was appointed CEO of Chembio Diagnostics, Inc. (NASDAQ:CEMI). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does John Sperzel’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Chembio Diagnostics, Inc. has a market cap of US$117m, and is paying total annual CEO compensation of US$1.5m. (This figure is for the year to December 2018). We note that’s an increase of 169% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$417k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$451k.
Thus we can conclude that John Sperzel receives more in total compensation than the median of a group of companies in the same market, and of similar size to Chembio Diagnostics, Inc.. However, this doesn’t necessarily mean the pay 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 Chembio Diagnostics has changed over time.
Is Chembio Diagnostics, Inc. Growing?
Over the last three years Chembio Diagnostics, Inc. has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). It achieved revenue growth of 34% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Chembio Diagnostics, Inc. Been A Good Investment?
Given the total loss of 21% over three years, many shareholders in Chembio Diagnostics, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by Chembio Diagnostics, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. This doesn’t look great when you consider CEO remuneration is up on last year. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Chembio Diagnostics (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.
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.