John Sperzel became the CEO of Chembio Diagnostics, Inc. (NASDAQ:CEMI) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. 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 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$119m, and is paying total annual CEO compensation of US$542k. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$415k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$297k.
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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Chembio Diagnostics has changed over time.
Is Chembio Diagnostics, Inc. Growing?
Chembio Diagnostics, Inc. saw earnings per share stay pretty flat over the last three years, albeit with a slight positive trend. In the last year, its revenue is up 43%.
It’s great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn’t shabby. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. It could be important to check this free visual depiction of what analysts expect for the future.
Has Chembio Diagnostics, Inc. Been A Good Investment?
Chembio Diagnostics, Inc. has served shareholders reasonably well, with a total return of 31% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Chembio Diagnostics, 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.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. Considering this, we wouldn’t want to see any big pay rises, although we’d stop short of calling the CEO compensation unfair. So you may want to check if insiders are buying Chembio Diagnostics shares with their own money (free access).
If you want to buy a stock that is better than Chembio Diagnostics, this free list of high return, low debt companies is a great place to look.
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.