Should You Worry About GenMark Diagnostics, Inc.’s (NASDAQ:GNMK) CEO Pay Cheque?

Hany Massarany became the CEO of GenMark Diagnostics, Inc. (NASDAQ:GNMK) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for GenMark Diagnostics

How Does Hany Massarany’s Compensation Compare With Similar Sized Companies?

According to our data, GenMark Diagnostics, Inc. has a market capitalization of US$418m, and pays its CEO total annual compensation worth US$3.5m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$490k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.6m.

Thus we can conclude that Hany Massarany receives more in total compensation than the median of a group of companies in the same market, and of similar size to GenMark 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 a visual representation of the CEO compensation at GenMark Diagnostics, below.

NasdaqGM:GNMK CEO Compensation, March 20th 2019
NasdaqGM:GNMK CEO Compensation, March 20th 2019

Is GenMark Diagnostics, Inc. Growing?

Over the last three years GenMark Diagnostics, Inc. has grown its earnings per share (EPS) by an average of 1.8% per year (using a line of best fit). In the last year, its revenue is up 35%.

It’s great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Shareholders might be interested in this free visualization of analyst forecasts.

Has GenMark Diagnostics, Inc. Been A Good Investment?

Most shareholders would probably be pleased with GenMark Diagnostics, Inc. for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We compared total CEO remuneration at GenMark Diagnostics, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling GenMark Diagnostics shares (free trial).

Important note: GenMark Diagnostics may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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 editorial-team@simplywallst.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.