Obi Greenman has been the CEO of Cerus Corporation (NASDAQ:CERS) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cerus.
Comparing Cerus Corporation's CEO Compensation With the industry
Our data indicates that Cerus Corporation has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$3.3m for the year to December 2019. We note that's an increase of 9.6% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$645k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.4m. Accordingly, our analysis reveals that Cerus Corporation pays Obi Greenman north of the industry median. Moreover, Obi Greenman also holds US$5.6m worth of Cerus stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. Cerus is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Cerus Corporation's Growth Numbers
Cerus Corporation has seen its earnings per share (EPS) increase by 8.8% a year over the past three years. In the last year, its revenue is up 17%.
This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Cerus Corporation Been A Good Investment?
Boasting a total shareholder return of 206% over three years, Cerus Corporation has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, Cerus Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But shareholder returns have been positive for the last three years. That's why we were hoping earnings growth would match this growth, but sadly that is not the case. So, although we would've liked to see stronger EPS growth, positive investor returns lead us to believe CEO compensation is reasonable.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Cerus that you should be aware of before investing.
Important note: Cerus is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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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