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Paul Bolno became the CEO of Wave Life Sciences Ltd. (NASDAQ:WVE) 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. 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.
How Does Paul Bolno’s Compensation Compare With Similar Sized Companies?
Our data indicates that Wave Life Sciences Ltd. is worth US$788m, and total annual CEO compensation is US$5.8m. (This number is for the twelve months until December 2018). That’s a notable increase of 83% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$541k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.
It would therefore appear that Wave Life Sciences Ltd. pays Paul Bolno 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Wave Life Sciences has changed from year to year.
Is Wave Life Sciences Ltd. Growing?
Wave Life Sciences Ltd. has reduced its earnings per share by an average of 36% a year, over the last three years (measured with a line of best fit). Its revenue is up 225% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Wave Life Sciences Ltd. Been A Good Investment?
Wave Life Sciences Ltd. has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Wave Life Sciences Ltd. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Whatever your view on compensation, you might want to check if insiders are buying or selling Wave Life Sciences shares (free trial).
If you want to buy a stock that is better than Wave Life Sciences, this free list of high return, low debt companies is a great place to look.
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.