Alan Auerbach has been the CEO of Puma Biotechnology, Inc. (NASDAQ:PBYI) since 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Alan Auerbach’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Puma Biotechnology, Inc. has a market cap of US$1.3b, and is paying total annual CEO compensation of US$2.8m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$733k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.6m.
So Alan Auerbach receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Puma Biotechnology has changed from year to year.
Is Puma Biotechnology, Inc. Growing?
Puma Biotechnology, Inc. has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). Its revenue is up 807% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Puma Biotechnology, Inc. Been A Good Investment?
With a total shareholder return of 1.8% over three years, Puma Biotechnology, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Alan Auerbach is close enough to the median pay for a CEO of a similar sized company .
The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Puma Biotechnology shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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