Should You Worry About NewLink Genetics Corporation’s (NASDAQ:NLNK) CEO Pay?

Charles Link has been the CEO of NewLink Genetics Corporation (NASDAQ:NLNK) since 2003. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

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How Does Charles Link’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that NewLink Genetics Corporation has a market cap of US$58m, and is paying total annual CEO compensation of US$3.4m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$635k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$303k.

As you can see, Charles Link is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NewLink Genetics Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at NewLink Genetics has changed over time.

NasdaqGM:NLNK CEO Compensation January 11th 19
NasdaqGM:NLNK CEO Compensation January 11th 19

Is NewLink Genetics Corporation Growing?

Over the last three years NewLink Genetics Corporation has shrunk its earnings per share by an average of 23% per year. It saw its revenue drop -29% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

It could be important to check this free visual depiction of what analysts expect for the future.

Has NewLink Genetics Corporation Been A Good Investment?

With a three year total loss of 94%, NewLink Genetics Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at NewLink Genetics Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if NewLink Genetics insiders are buying or selling shares.

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 editorial-team@simplywallst.com.