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In 2014 Armando Anido was appointed CEO of Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Armando Anido’s Compensation Compare With Similar Sized Companies?
Our data indicates that Zynerba Pharmaceuticals, Inc. is worth US$297m, and total annual CEO compensation is US$2.0m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$568k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.
As you can see, Armando Anido is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Zynerba Pharmaceuticals, 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.
You can see a visual representation of the CEO compensation at Zynerba Pharmaceuticals, below.
Is Zynerba Pharmaceuticals, Inc. Growing?
Over the last three years Zynerba Pharmaceuticals, Inc. has shrunk its earnings per share by an average of 1.9% per year (measured with a line of best fit). It achieved revenue growth of 151% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. 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.
Has Zynerba Pharmaceuticals, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Zynerba Pharmaceuticals, Inc. for providing a total return of 102% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Zynerba Pharmaceuticals, 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.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Zynerba Pharmaceuticals shares (free trial).
Important note: Zynerba Pharmaceuticals may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 email@example.com. 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.