Meenu Chhabra became the CEO of Proteostasis Therapeutics, Inc. (NASDAQ:PTI) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Meenu Chhabra’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Proteostasis Therapeutics, Inc. has a market cap of US$37m, and is paying total annual CEO compensation of US$1.3m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$515k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$481k.
As you can see, Meenu Chhabra is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Proteostasis Therapeutics, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Proteostasis Therapeutics has changed from year to year.
Is Proteostasis Therapeutics, Inc. Growing?
Over the last three years Proteostasis Therapeutics, Inc. has grown its earnings per share (EPS) by an average of 50% per year (using a line of best fit). In the last year, its revenue is up 31%.
This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
Has Proteostasis Therapeutics, Inc. Been A Good Investment?
Given the total loss of 95% over three years, many shareholders in Proteostasis Therapeutics, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Proteostasis Therapeutics, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Proteostasis Therapeutics (free visualization of insider trades).
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