Is Coherus BioSciences, Inc.’s (NASDAQ:CHRS) CEO Pay Fair?

Denny Lanfear has been the CEO of Coherus BioSciences, Inc. (NASDAQ:CHRS) since 2010. 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 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.

View our latest analysis for Coherus BioSciences

How Does Denny Lanfear’s Compensation Compare With Similar Sized Companies?

Our data indicates that Coherus BioSciences, Inc. is worth US$1.0b, and total annual CEO compensation is US$2.7m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$656k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.2m.

So Denny Lanfear receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Coherus BioSciences has changed from year to year.

NasdaqGM:CHRS CEO Compensation, April 7th 2019
NasdaqGM:CHRS CEO Compensation, April 7th 2019

Is Coherus BioSciences, Inc. Growing?

Coherus BioSciences, Inc. has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). Its revenue is down -100% over last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Coherus BioSciences, Inc. Been A Good Investment?

Since shareholders would have lost about 35% over three years, some Coherus BioSciences, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Denny Lanfear is paid around the same as most CEOs of similar size companies.

We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Coherus BioSciences (free visualization of insider trades).

Important note: Coherus BioSciences 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.