Should You Be Pleased About The CEO Pay At Veracyte, Inc.’s (NASDAQ:VCYT)

Bonnie Anderson became the CEO of Veracyte, Inc. (NASDAQ:VCYT) in 2008. 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

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How Does Bonnie Anderson’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Veracyte, Inc. has a market cap of US$577m, and is paying total annual CEO compensation of US$2.2m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$550k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO compensation of that group was US$1.6m.

As you can see, Bonnie Anderson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Veracyte, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Veracyte has changed from year to year.

NasdaqGM:VCYT CEO Compensation January 18th 19
NasdaqGM:VCYT CEO Compensation January 18th 19

Is Veracyte, Inc. Growing?

Veracyte, 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). In the last year, its revenue is up 22%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Veracyte, Inc. Been A Good Investment?

Boasting a total shareholder return of 171% over three years, Veracyte, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

We compared the total CEO remuneration paid by Veracyte, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Veracyte.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

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 editorial-team@simplywallst.com.