John Butler has been the CEO of Akebia Therapeutics Inc (NASDAQ:AKBA) since 2013. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does John Butler’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Akebia Therapeutics Inc has a market cap of US$396m, and is paying total annual CEO compensation of US$3.4m. That’s a notable increase of 28% on last year. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO compensation was US$1.6m.
It would therefore appear that Akebia Therapeutics Inc pays John Butler more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Akebia Therapeutics has changed from year to year.
Is Akebia Therapeutics Inc Growing?
Akebia Therapeutics Inc has increased its earnings per share (EPS) by an average of 16% a year, over the last three years Its revenue is up 155% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Akebia Therapeutics Inc Been A Good Investment?
Given the total loss of 30% over three years, many shareholders in Akebia Therapeutics Inc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Akebia Therapeutics Inc with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. This doesn’t look great when you consider CEO remuneration is up on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation.
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.