In 2012 Peter Maag was appointed CEO of CareDx, Inc (NASDAQ:CDNA). 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.
Want to help shape the future of investing tools? Participate in a short research study and receive a 6-month subscription to the award winning Simply Wall St research tool (valued at $60)!
How Does Peter Maag's Compensation Compare With Similar Sized Companies?
Our data indicates that CareDx, Inc is worth US$1.1b, and total annual CEO compensation is US$1.4m. (This is based on the year to 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$450k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO compensation was US$2.2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at CareDx, below.
Is CareDx, Inc Growing?
CareDx, Inc has reduced its earnings per share by an average of 19% a year, over the last three years. In the last year, its revenue is up 40%.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching.
You might want to check this free visual report on analyst forecasts for future earnings.
Has CareDx, Inc Been A Good Investment?
Boasting a total shareholder return of 485% over three years, CareDx, Inc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
CareDx, Inc is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Peter Maag is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CareDx (free visualization of insider trades).
Or you might rather take a peek at this analytical visualization of historic cash flow, 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.