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In 2014 Matt Pauls was appointed CEO of Strongbridge Biopharma plc (NASDAQ:SBBP). 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 – 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 Matt Pauls’s Compensation Compare With Similar Sized Companies?
Our data indicates that Strongbridge Biopharma plc is worth US$248m, and total annual CEO compensation is US$1.6m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$500k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$950k.
It would therefore appear that Strongbridge Biopharma plc pays Matt Pauls more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. 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 Strongbridge Biopharma has changed over time.
Is Strongbridge Biopharma plc Growing?
Over the last three years Strongbridge Biopharma plc has grown its earnings per share (EPS) by an average of 1.2% per year (using a line of best fit). It achieved revenue growth of 306% over the last year.
It’s hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. It could be important to check this free visual depiction of what analysts expect for the future.
Has Strongbridge Biopharma plc Been A Good Investment?
With a total shareholder return of 24% over three years, Strongbridge Biopharma plc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Strongbridge Biopharma plc pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. So it’s certainly hard to argue that the CEO is modestly paid, although we don’t see the remuneration as an issue. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Strongbridge Biopharma (free visualization of insider trades).
If you want to buy a stock that is better than Strongbridge Biopharma, this free list of high return, low debt companies is a great place to look.
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 email@example.com.