Is Exact Sciences Corporation’s (NASDAQ:EXAS) CEO Overpaid Relative To Its Peers?

In 2009 Kevin Conroy was appointed CEO of Exact Sciences Corporation (NASDAQ:EXAS). First, this article will compare CEO compensation with compensation at other large companies. 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 Exact Sciences

How Does Kevin Conroy’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Exact Sciences Corporation has a market cap of US$11b, and is paying total annual CEO compensation of US$13m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$633k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.

That means Kevin Conroy receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Exact Sciences has changed over time.

NasdaqCM:EXAS CEO Compensation, March 27th 2019
NasdaqCM:EXAS CEO Compensation, March 27th 2019

Is Exact Sciences Corporation Growing?

On average over the last three years, Exact Sciences Corporation has grown earnings per share (EPS) by 18% each year (using a line of best fit). It achieved revenue growth of 71% over the 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. Shareholders might be interested in this free visualization of analyst forecasts.

Has Exact Sciences Corporation Been A Good Investment?

Boasting a total shareholder return of 1328% over three years, Exact Sciences Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Remuneration for Kevin Conroy is close enough to the median pay for a CEO of a large company .

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Exact Sciences.

If you want to buy a stock that is better than Exact Sciences, this free list of high return, low debt companies is a great place to look.

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.