A Quick Analysis On Puma Biotechnology's (NASDAQ:PBYI) CEO Compensation

Alan Auerbach became the CEO of Puma Biotechnology, Inc. (NASDAQ:PBYI) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Puma Biotechnology pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Puma Biotechnology

How Does Total Compensation For Alan Auerbach Compare With Other Companies In The Industry?

According to our data, Puma Biotechnology, Inc. has a market capitalization of US$454m, and paid its CEO total annual compensation worth US$3.8m over the year to December 2019. That's a notable decrease of 39% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$780k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.0m. Hence, we can conclude that Alan Auerbach is remunerated higher than the industry median. What's more, Alan Auerbach holds US$47m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 25% of total compensation represents salary and 75% is other remuneration. Puma Biotechnology pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Puma Biotechnology, Inc.'s Growth Numbers

Puma Biotechnology, Inc.'s earnings per share (EPS) grew 62% per year over the last three years. Its revenue is down 16% over the previous 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Puma Biotechnology, Inc. Been A Good Investment?

With a three year total loss of 88% for the shareholders, Puma Biotechnology, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Alan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its EPS growth, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Puma Biotechnology that investors should be aware of in a dynamic business environment.

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.

If you’re looking to trade Puma Biotechnology, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.