A Look At Jounce Therapeutics' (NASDAQ:JNCE) CEO Remuneration

This article will reflect on the compensation paid to Rich Murray who has served as CEO of Jounce Therapeutics, Inc. (NASDAQ:JNCE) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Jounce Therapeutics

Comparing Jounce Therapeutics, Inc.'s CEO Compensation With the industry

According to our data, Jounce Therapeutics, Inc. has a market capitalization of US$274m, and paid its CEO total annual compensation worth US$1.5m over the year to December 2019. Notably, that's a decrease of 60% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$541k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.5m. This suggests that Jounce Therapeutics remunerates its CEO largely in line with the industry average. Moreover, Rich Murray also holds US$314k worth of Jounce Therapeutics stock directly under their own name.

On an industry level, around 25% of total compensation represents salary and 75% is other remuneration. Jounce Therapeutics is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Jounce Therapeutics, Inc.'s Growth

Jounce Therapeutics, Inc. has seen its earnings per share (EPS) increase by 24% a year over the past three years. It has seen most of its revenue evaporate over the past year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Jounce Therapeutics, Inc. Been A Good Investment?

Since shareholders would have lost about 50% over three years, some Jounce Therapeutics, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Jounce Therapeutics pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Rich is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Jounce Therapeutics (2 are a bit unpleasant!) that you should be aware of before investing here.

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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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