Jeff Jonas became the CEO of Sage Therapeutics, Inc. (NASDAQ:SAGE) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Jeff Jonas’s Compensation Compare With Similar Sized Companies?
Our data indicates that Sage Therapeutics, Inc. is worth US$8.4b, and total annual CEO compensation is US$9.8m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$642k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.
Thus we can conclude that Jeff Jonas receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sage Therapeutics, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Sage Therapeutics, below.
Is Sage Therapeutics, Inc. Growing?
Sage Therapeutics, Inc. has reduced its earnings per share by an average of 31% a year, over the last three years (measured with a line of best fit). Its revenue is down -98% over 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Sage Therapeutics, Inc. Been A Good Investment?
Boasting a total shareholder return of 347% over three years, Sage Therapeutics, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Sage Therapeutics, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. Shareholders may want to check for free if Sage Therapeutics insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.