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Patrick Mahaffy has been the CEO of Clovis Oncology, Inc. (NASDAQ:CLVS) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Patrick Mahaffy’s Compensation Compare With Similar Sized Companies?
Our data indicates that Clovis Oncology, Inc. is worth US$1.4b, and total annual CEO compensation is US$8.7m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$636k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO compensation was US$3.4m.
Thus we can conclude that Patrick Mahaffy receives more in total compensation than the median of a group of companies in the same market, and of similar size to Clovis Oncology, Inc.. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Clovis Oncology, below.
Is Clovis Oncology, Inc. Growing?
On average over the last three years, Clovis Oncology, Inc. has grown earnings per share (EPS) by 15% each year (using a line of best fit). In the last year, its revenue is up 113%.
This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has Clovis Oncology, Inc. Been A Good Investment?
Boasting a total shareholder return of 37% over three years, Clovis Oncology, Inc. 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.
We compared the total CEO remuneration paid by Clovis Oncology, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Clovis Oncology insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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 email@example.com.